area handbook series 

Iran 

a country study 



Iran 

a country study 



Federal Research Division 
Library of Congress 
Edited by 
Glenn E. Curtis and 
Eric Hooglund 




On the cover: A bas-relief of a bearded sphinx, ca. 500 B.C., from 
Persepolis 



Fifth Edition, First Printing, 2008. 

Library of Congress Cataloging-in-Publication Data 

Iran: a country study/edited by Glenn E. Curtis and Eric Hooglund. - 
5th ed. 
p. cm. 

Includes bibliographical references and index. 
ISBN 978-0-8444-1187-3 

1. Iran. 2. Iran-History. I. Curtis, Glenn E. (Glenn Eldon), 1946- II. 
Hooglund, Eric J. (Eric James), 1944- 
DS254.5.I732 2008 
955-dc22 



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where included. 



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ISBN 978-0-8444-1 187-3 



Foreword 



This volume is one in a continuing series of books prepared 
by the Federal Research Divison of the Library of Congress 
under the Country Studies/Area Handbook Program, formerly 
sponsored by the Department of the Army and revived in FY 
2004 with congressionally mandated funding under the spon- 
sorship of the Joint Chiefs of Staff, Strategic Plans and Policy 
Directorate (J-5). 

Most books in the series deal with a particular foreign coun- 
try, describing and analyzing its political, economic, social, and 
national security systems and institutions, and examining the 
interrelationshps of those systems and the ways they are shaped 
by historical and cultural factors. Each study is written by a mul- 
tidisciplinary team of social scientists. The authors seek to pro- 
vide a basic understanding of the observed society, striving for a 
dynamic rather than a static portrayal. Particular attention is 
devoted to the people who make up the society, their origins, 
dominant beliefts and values, their common interests and the 
issues on which they are divided, the nature and extent of their 
involvement with national institutions, and their attitudes 
toward each other and toward their social system and political 
order. 

The books represent the analysis of the authors and should 
not be construed as an expression of an official U.S. govern- 
ment position, policy, or decision. The authors have sought to 
adhere to accepted standards of scholarly objectivity. Correc- 
tions, additions, and suggestions for changes from readers will 
be welcomed for use in future editions. 

Chief 

Federal Research Division 
Library of Congress 
Washington, DC 20540-4840 
E-mail: frds@loc.gov 



iii 



Acknowledgments 



The editors wish to acknowledge the contributions of the 
authors of the 1989 edition of Iran: A Country Study, edited by 
Helen Chapin Metz, on which this revised edition is based. 

The editors are grateful to individuals in various government 
agencies and private institutions who contributed their time, 
research materials, and expertise to the production of this 
book. In particular, the editors would like to acknowledge the 
generosity of the individuals and public and private agencies 
that allowed their photographs to be used in this study. 

The editors also wish to thank members of the Federal 
Research Division staff who contributed directly to the prepara- 
tion of the manuscript. These individuals include Sandra W. 
Meditz, who reviewed all graphic and textual materials and 
managed editing and book production; and Janie L. Gilchrist, 
who did the word processing. Outside contributors include 
Vincent Ercolano, who edited chapters, and Christopher S. 
Robinson, who prepared the book's graphics as well as the final 
digital manuscript for the printer. Special thanks are owed to 
Theresa E. Kamp, who designed the cover artwork and the 
illustrations on the title page of each chapter. 



Contents 



Page 

Foreword iii 

Acknowledgments v 

Preface xiii 

Table A. Chronology of Important Events xv 

Country Profile xxiii 

Introduction xxxix 

Chapter 1. Historical Setting 1 

Shaul Bakhash 

ANCIENT IRAN 6 

PreAchaemenian Iran 6 

Immigration of the Medes and the Persians 6 

The Achaemenian Empire, 550-330 B.C 7 

Alexander the Great, the Seleucids, and the 

Parthians 10 

The Sassanians, AD. 224-642 11 

Islamic Conquest 13 

INVASIONS OF THE MONGOLS AND 

TAMERLANE 17 

THE SAFAVIS, 1501-1722 18 

THE QAJARS, 1795-1925 22 

The Constitutional Revolution 25 

World War I 26 

THE ERA OF REZA SHAH, 1921-41 27 

WORLD WAR II AND THE AZARBAIJAN CRISIS 30 

MOSSADEQAND OIL NATIONALIZATION 32 

THE POST-MOSSADEQERA AND THE SHAH'S 

WHITE REVOLUTION 35 

State and Society, 1964-74 37 

Renewed Opposition 44 

The Coming of the Revolution 46 

vii 



THE BAKHTIAR GOVERNMENT 50 

THE REVOLUTION 52 

Bazargan and the Provisional Government 52 

The New Constitution 56 

The Bani Sadr Presidency 57 

Terror and Repression 63 

Consolidation of the Revolution 66 

Khomeini's Last Years 68 

THE POST-KHOMEINI ERA 70 

The Rafsanjani Presidency 70 

Khatami and the Reform Movement 76 

Chapter 2. The Society and Its Environment 81 

Eric Hooglund 

GEOGRAPHY 84 

Topography 85 

Climate 87 

Environment 87 

POPULATION 88 

Emigration 89 

Refugees 90 

LANGUAGES AND PEOPLES 91 

The Persian Language and People 91 

Other Indo-Iranian-Speaking Groups 93 

Turkic-Speaking Groups 96 

Semitic Groups 99 

Armenians 101 

STRUCTURE OF SOCIETY 101 

Urban Society 102 

Social Class in Contemporary Iran 104 

Urban Migration 108 

Rural Society ■ 108 

Nomadic Society 110 

THE FAMILY 112 

GENDER ISSUES 115 

Traditional Attitudes Toward Segregation 

of the Sexes 115 

Female Participation in the Workforce 116 

RELIGION 118 

Shia Islam in Iran 118 

viii 



Sunni Muslims 127 

Non-Muslim Minorities 128 

EDUCATION 132 

HEALTH AND WELFARE 135 

Medical Personnel and Facilities 136 

Health Hazards and Preventative Medicine 137 

Water Supply and Sanitation 138 

Welfare 139 

Chapter 3. The Economy 143 

Hossein Akhavi-Pour 

HISTORICAL BACKGROUND 146 

The Economy under the Pahlavis, 1925-79 146 

The Economy after the Islamic Revolution, 

1979-Present 149 

THE ROLE OF GOVERNMENT 150 

HUMAN RESOURCES 153 

Labor Force Participation 153 

Unemployment 154 

The Distribution of Employment 155 

Organized Labor 156 

NATIONAL OUTPUT MEASUREMENTS 156 

Gross Domestic Product 156 

Gross Domestic Expenditure 159 

The Informal Sector 159 

THE PETROLEUM INDUSTRY 1 60 

Historical Overview 160 

Oil Production and Reserves 162 

Oil Refining and Consumption 163 

Trade in Oil and Oil Products 163 

Natural Gas 165 

Petrochemicals 166 

MINING 167 

AGRICULTURE, FORESTRY, AND FISHING 168 

Crops and Livestock 169 

Government Agricultural Policy 170 

Forestry 172 

Fishing 172 

INDUSTRY AND CONSTRUCTION 173 

Handicrafts 173 

ix 



Manufacturing 176 

Construction and Housing 180 

SERVICES 180 

Domestic Trade and Distribution 181 

Insurance 181 

Tourism 182 

TRANSPORTATION AND 

TELECOMMUNICATIONS 183 

Roads 183 

Railroads 185 

Water Transport 186 

Air Transport 188 

Electronic Media and Telecommunications 188 

ENERGY SUPPLY 190 

FISCAL AND MONETARY POLICY 191 

Fiscal Policy 191 

Banking and Monetary Policy , .. 194 

INTERNATIONAL TRADE AND THE BALANCE 

OF PAYMENTS 197 

Imports 198 

Nonoil Exports 199 

Balance of Payments and Debt 200 

The Foreign-Exchange System 201 

Foreign Direct Investment 202 

Chapter 4. Government and Politics 205 

Mark Gasiorowski 

POLITICAL DYNAMICS 208 

A Reformist Comes to Power 208 

Conservatives Strike Back 208 

The Power Struggle Intensifies 209 

The Reformists Retreat 210 

Khatami's Second Term 212 

The End of the Khatami Era 214 

GOVERNMENT INSTITUTIONS 215 

The Leader, or Faqih 218 

The Assembly of Experts 220 

The President and Cabinet 221 

The Parliament 221 

The Guardians Council 222 



X 



The Expediency Council 222 

The Judiciary 223 

The Problem of Dual Sovereignty 224 

Local Government 226 

The Electoral System 227 

POLITICAL PARTIES AND CIVIL SOCIETY 229 

The Reformist Coalition 229 

The Centrist Faction 230 

The Conservative Coalition 231 

Other Political Groups 232 

Civil Society Organizations 233 

HUMAN RIGHTS 233 

MASS MEDIA AND THE ARTS 237 

FOREIGN POLICY 240 

Relations with Europe 240 

Relations with Neighboring Arab Countries 243 

Relations with other Middle Eastern Countries. . . . 244 

Relations with Neighbors to the North and East . . . 246 

The United States and Iran 248 

Chapter 5. National Security 255 

Jalil Roshandel 

THE ARMED FORCES 258 

Historical Background 258 

Command and Control 262 

Decision Making 264 

Organization, Size, and Equipment 264 

SPECIAL AND IRREGULAR ARMED FORCES 269 

The Islamic Revolutionary Guard Corps 

(IRGC) 269 

The Basij 270 

ARMS ACQUISITION 272 

Arms Imports 272 

Domestic Arms Production 274 

Missiles 275 

INTERNAL SECURITY 276 

Intelligence Services 276 

Law Enforcement 277 

THE MILITARY'S RELATIONS WITH SOCIETY 278 

DEFENSE ECONOMICS 279 

xi 



MILITARY DOCTRINE 280 

The Legacy of the Iran-Iraq War 281 

Contemporary Security Policy 282 

NUCLEAR ISSUES 285 

International Reactions to Iran's Nuclear 

Program 286 

Nuclear Facilities 287 

Appendix. Tables 291 

Bibliography 299 

Glossary 327 

Index 331 

Contributors 351 

Published Country Studies 353 

List of Figures 

1 Administrative Divisions xxxviii 

2 Persian Empire, ca. 500 B.C 8 

3 Sassanian Empire, Sixth Century A.D 12 

4 Initial Iraqi Attack on Iran, 

September-November 1980 62 

5 Physical Features 86 

6 Population Distribution by Age 

and Sex, 2006 90 

7 Major Ethnic Groups 92 

8 Industry and Mining, 2005 164 

9 Transportation System, 2005 184 

10 National Budget Expenditures for Social and 

Economic Purposes, Fiscal Year 2004 194 

1 1 Appointive Powers of the Leader 220 

12 Strait of Hormuz and Vicinity 268 



xii 



Preface 



Like its predecessor, this study is an attempt to treat in a con- 
cise and objective manner the dominant social, political, eco- 
nomic, and military aspects of contemporary Iran. Sources of 
information included scholarly journals and monographs, offi- 
cial reports of governments and international organizations, 
foreign and domestic newspapers, and numerous periodicals 
and Internet sources. Chapter bibliographies appear at the end 
of the book; at the end of each chapter is a brief comment on 
some of the more valuable sources suggested as further read- 
ing. The Glossary provides supplementary explanations of 
words and terms used frequently or having particular impor- 
tance. Measurements are given in the metric system; a conver- 
sion table is provided to assist those readers who are unfamiliar 
with metric measurements (see table 1, Appendix). 

The use of foreign words and terms has been confined to 
those essential to understanding the text, with a brief defini- 
tion upon first usage and additional treatment in the Glossary. 
The transliteration of Persian words and phrases posed a par- 
ticular problem. The expertise of Dr. Eric Hooglund was most 
helpful in identifying the most acceptable forms. For words 
that are of direct Arabic origin — such as Muhammad (the 
Prophet) and Muslim — the authors followed a modified ver- 
sion of the system for Arabic adopted by the U.S. Board on 
Geographic Names and the Permanent Committee on Geo- 
graphic Names for British Official Use, known as the BGN/ 
PCGN system. (The modification is a significant one, entailing 
the deletion of all diacritical marks and hyphens.) The BGN/ 
PCGN system also was used to transliterate Persian words, again 
without the diacritics. However, place-names that are widely 
known by another spelling have been rendered in that form 
when the use of the BGN/PCGN system might have caused 
confusion. For example, the reader will find Basra for the city 
rather than Al Basrah. Similarly, where variants exist, the 
names of well-known individuals have been rendered in the 
form thought to be most familiar to readers — for example, 
Khamenei rather than Khamenehi for Iran's Leader. 

Readers not familiar with the Iranian calendar should be 
aware, when consulting Iranian sources, that the Iranian calen- 
dar differs in several significant respects from the Gregorian 



xiii 



calendar used in the West. The Iranian calendar is a solar cal- 
endar that begins each year at the vernal equinox (usually 
March 21). Years in the Iranian calendar are counted begin- 
ning with 622 A.D., the year of Muhammad's flight from Mecca 
to Medina. The current Iranian calendar year, which began in 
March 2008, is 1387. 

Research for this revised volume began in late 2004, and 
updates of drafts written primarily in 2005 continued through- 
out 2006 and into 2007. Although a comprehensive update of 
the entire volume could not be undertaken, updated informa- 
tion has been incorporated where available. The book's overall 
information cutoff date is October 2007. 



xiv 



Table A. Chronology of Important Events 



EARLY HISTORY 
ca. 3400 B.C. 

ca. 2000 B.C. 

SIXTH CENTURY B.C. 
ca. 553-550 B.C. 

539 B.C. 
525 B.C. 
522 B.C. 

FIFTH CENTURY B.C. 
490 B.C. 

FOURTH CENTURY B.C. 
334 B.C. 

323 B.C. 

THIRD CENTURY B.C. 
247 B.C. 

THIRD CENTURY A.D. 
A.D. 224 

A.D. 260 

SEVENTH CENTURY 
637 

641-42 
661 

EIGHTH CENTURY 
750 

NINTH-TENTH CENTURIES 



Elamite kingdom emerges in southwestern Iran and Mesopota- 
mia. 

Nomadic peoples — Scythians, Medes, and Persians move from 
Central Asia to Iranian plateau. 

Cyrus II (also known as Cyrus the Great or Cyrus the Elder) over- 
throws Medean king; becomes ruler of Persia and Media; founds 
Achaemenian Empire. 

Cyrus captures Babylon, releases Jews from captivity. 
Cyrus's son Cambyses II conquers Egypt. 

Darius I becomes king; restablishes and extends empire, carries 
out administrative reorganization. 

Darius invades Greek mainland; defeated at the Battle of Mara- 
thon. 



Alexander the Great begins Persian campaign; completes con- 
quest of Persia and Mesoptamia, 330 B.C. 

Death of Alexander; division of empire among generals; Seleu- 
cids emerge as principal heirs in Iran. 



Parthians overthrow Seleucids; establish own dynasty. 



Ardeshir overthrows last Parthian ruler; establishes Sassanian 
dynasty with capital at Ctesiphon. 

Shahpur I wages campaign against Romans, takes emperor Vale- 
rian captive. 



Muslim armies capture Ctesiphon, Sassanian Empire begins to 
crumble. 

Sassanian army defeated at Nahavand; Iran comes under Muslim 
rule. 

After assassination of Ali, son-in-law of Muhammad, Umayyads 
establish new dynasty with capital at Damascas. 



Abbasids, from base in Khorasan, overthrow Umayyads, establish 
capital at Baghdad. 



Emergence of virtually independent local dynasties in northeast- 
ern and eastern Iran; court patronage leads to flowering of Per- 
sian language, poetry, and literature. 



XV 



Table A. Chronology of Important Events ( Continued ) 



ELEVENTH CENTURY 
1055 

THIRTEENTH CENTURY 

ca. 1219 

1258 

1295 

FOURTEENTH CENTURY 

ca. 1335 

1381 

FIFTEENTH CENTURY 
1405 

SIXTEENTH CENTURY 

1501 

1587 

EIGHTEENTH CENTURY 

1722 

1729 

1736 

ca. 1738-39 

1747 
1750 

1779 
1795 

1797 

NINETEENTH CENTURY 
1812 

1828 

1834 
1848 



Seljuk chief Tughril Beg consolidates rule over Iran; receives title 
"King of the East" from caliph in Baghdad. 



Beginning of Mongol invasion under Genghis (Chinggis) Khan. 

Mongols sack Baghdad and consolidate rule over Iran. 

Ghazan Khan, a convert to Islam, becomes Mongol ruler, aided 
by his famous Iranian vizier, Rashid ad Din; period of reform, sta- 
bilization. 



End of centralized Mongol rule. 

Timur, also called Tamerlane (Timur the Lame), makes himself 
master of Iran. 



Death of Timur; rapid disintegration of his empire; long period 
of fragmented rule in Iran. 



Safavis seize power in Tabriz; Ismail Safavi proclaimed shah. 

Shah Abbas succeeds to the throne; his reign (1587-1629) marks 
apogee of Safavi power, cultural flowering. 



Afghan tribesmen enter Esfahan; Safavi Empire collapses. 

Tahmasp Quli, chief of Afshar tribe, expels Afghans, rules in 
name of Safavis. 

Tahmasp Quli assumes throne in own name as Nader Shah. 

Nader Shah, in series of military campaigns, extends Iran's bor- 
ders into Georgia, Armenia, and Afghanistan; sacks Delhi. 

Assassination of Nader Shah; his empire fragments. 

Karim Khan Zand consolidates power in southern Iran with his 
capital at Shiraz; adopts title of vakil al ruaya, or deputy of the 
subjects. 

Death of Karim Khan; tribal struggle for succession ensues. 

Agha Mohammad Qajar, having made himself master of Iran, is 
crowned king, inaugurating Qajar dynasty; establishes capital at 
Tehran. 

Death of Agha Mohammad; succession of Fath Ali Shah. 



First Russo-Persian War ends in Treaty of Gulistan. Iran cedes ter- 
ritory to Russia in Caucasus. 

Second Russo-Persian War ends in Treaty of Turkmanchay. Iran 
cedes additional territory in Caucasus, pays indemnity, extends 
capitulatory rights to Russian (and later to other European) sub- 
jects. 

Death of Fath Ali Shah; succession of Mohammad Shah. 
Death of Mohammad Shah; succession of Naser ad Din Shah. 



xvi 



Table A. Chronology of Important Events (Continued) 



1851 

ca. 1853 
1857 

1871 

1872 

1888 

1891-92 
1896 



Founding of Dar ol Fonun, first school based on European 
model. 

Amir Kabir. Naser ad Din Shah's powerful prime minister, dis- 
missed, executed on shah's orders. 

Beginning of Russian expansion in Central Asia into territories 
claimed by Iran. 

British land troops in south; force Iran to end second siege of 
Herat in Afghanistan (first siege had ended under British pres- 
sure in 1837) . Treaty of Paris signed with Britain; Iran gives up all 
claims to Herat. 

Appointment of Mirza Hosain Khan Moshir od Dowleh as prime 
minister, marking start of era of reform, including cabinet-style 
government, advisory council to the shah, and foreign conces- 
sions. 

Shah grants railroad concession to British national, Baron Julius 
de Reuter; later cancels concession after protests by high offi- 
cials, clergy. 

Shah opens Karun River in Khuzestan Province to international 
commercial traffic; Imperial Bank of Persia established under 
concession to Reuter. 

Shah grants tobacco monopoly to a British national. Nationwide 
protests force him to cancel it. 

Naser ad Din Shah assassinated bv follower of Jamal ad Din al 
Afghani; succeeded by Muzaffar ad Din Shah. 



TWENTIETH CENTURY 

1900, 1902 

1901 

1905-6 

1906 

1907 

1908 



1909 



1911 



1914 
1914-19 



1919 
1921 



Shah contracts first and second Russian loans. 

British speculator William D'Arcy receives a concession to 
explore and develop southern Iran's oil resources. 

Antigovernment protests culminate in demand for a constitu- 
tion. 

Muzaffar ad Din Shah issues a decree promising a constitution. 

Majlis (parliament) ratifies constitution, shah signs it, changing 
government to a constitutional monarchy. 

Supglementarv Laws to constitution enacted. 

Anglo-Russian Agreement signed, dividing Iran into spheres of 
influence. 

Mohammad Ali Shah bombards parliament, suspends constitu- 
tion. 

Oil is discovered in Iran. 

Overthrow of Mohammad Ali Shah, restoration of the constitu- 
tion; Ahmad Shah begins reign. 

Anglo-Persian Oil Company (APOC) is formed. 

American Morgan Shuster arrives as financial adviser. 

Russian ultimatum and invasion, dismissal of Shuster, closure of 
parliament. 

Britain gains control of APOC. 

Iran declares neutrality in World War I but becomes battle- 
ground for Russian, British, and Turkish forces. 

Anglo-Persian Agreement signed, establishing a virtual British 
protectorate in Iran. 

Anglo-Persian Agreement rejected by the Majlis. 



XVII 



Table A. Chronology of Important Events (Continued) 



1921-25 
1923 



1924 
1925 



1927-32 
1932 



1933 
1935 

1936 

August 1941 

September 1941 
December 1945 

December 1946 

March 1951 
April 1951 
August 1953 

1954 

October 1955 

January 1962 

January 1963 
June 1963 

November 1964 

1971 

1974 

1975 
1978 

January 1979 



Army commander Reza Khan brings tribes under control. 

Ahmad Shah names Reza Khan prime minister, leaves Iran, 
never to return. 

Campaign to establish a republic abandoned after clerical objec- 
tions. 

Qajars deposed by act of Majlis. 

Reza Khan named shah by Majlis, establishes Pahlavi dynast}-. 

New civil code enacted. 

Uniform European dress code imposed. 

Shah cancels agreement under which the Anglo-Persian Oil 
Company (APOC) produced and exported Iran"s oil. 

A new 60-year Anglo-Persian oil agreement is signed. 

APOC is renamed the Anglo-Iranian Oil Companv (AIOC). 

Tehran University inaugurated. 

Abolition of the wearing of the veil. 

Troops fire on protesters inside the shrine of Imam Reza in 
Mashhad, eroding the shah's popular support. 

Anglo-Russian invasion of Iran after shah, who had declared Iran 
neutral in World War II, refuses to expel German nationals. 

Abdication of Reza Shah: Mohammad Reza Shah becomes ruler. 

Azarbaijan Democratic Partv declares autonomous republic. 

Kurdish Republic of Mahabad declared in Kurdistan. 

Iranian armv moves into Azarbaijan; autonomv movement, Kurd- 
ish Republic of Mahabad collapse. 

Majlis nationalizes oil industry. 

Mohammad Mossadeq becomes prime minister. 

Mossadeq overthrown in a coup engineered by the U.S. Central 
Intelligence Agency and Britain's MI— 5, supported by Iranian 
royalists. 

A new agreement divides profits equallv between the National 
Iranian Oil Companv (NIOC) and the multinational consortium 
that replaced the Anglo-Iranian Oil Company (AIOC). 

Iran is a charter member of the U.S.-supported Baghdad Pact 
(renamed the Central Treats' Organization — CENTO — after 
Iraq's withdrawal in 1958). 

Government approves law mandating breakup of large landhold- 
ings. 

Shah's "White Revolution" approved in a national referendum. 

Riots in Tehran and other major cities support Avatollah Sawid 
Ruhollah Musavi Khomeini. 

Khomeini sent into exile. 

Celebrations held to mark 2,500 years of Iranian monarchv. 

Organization of the Petroleum Exporting Countries (OPEC) 
quadruples oil prices; Iran's oil revenues rise dramatically. 

Algiers Agreement establishes the "thalweg" as the border 
between Iran and Iraq in the Shatt al Arab, giving Iran equal nav- 
igation rights in the waterway. 

Riots rock major Iranian cities. 

Shah leaves Iran. 



xviii 



Table A. Chronology of Important Events (Continued) 



February 1979 
March-April 1979 
May 1979 
June-July 1979 
November 1979 

December 1979 

January 1980 

April 1980 
September 1980 
January 1981 
June 1981 

October 1981 
August 1985 
1985-86 

August 1988 

February 1989 



June 1989 

July 1989 
1990 

1992 



June 1993 
1995 

1996 

May 1997 
1998 

February 1999 



Khomeini returns from exile, names provisional government 
and Revolutionary Council; collapse of Pahlavi monarchy. 

National referendum approves establishment of Islamic Repub- 
lic, which is declared on April 1. 

Khomeini authorizes establishment of the Islamic Revolutionary 
Guard Corps. 

Private-sector banks, insurance companies, industrial enter- 
prises, and large businesses are nationalized or expropriated. 

Iranian "students of the Imam's Line" occupy the U.S. embassy 
compound in Tehran and take American diplomats hostage. 
United States and Iran break diplomatic relations. 

Second national referendum approves new constitution, vesting 
supreme authority in the faqih, or Islamic religious law expert. 

Abolhasan Bani Sadr elected first president of the Islamic Repub- 
lic. 

United States tries but fails to rescue embassy hostages. 
Iraq invades Iran, launching Iran-Iraq war. 
U.S. Embassy hostages released. 

Bani Sadr impeached. Bloody struggle between regime and 
opposition forces ensues. 

Sayyid Ali Khamenei elected president. 

Khamenei elected to a second term as president. 

"Iran-Contra Affair," covert selling of U.S. arms to Iran for 
money given to anticommunist "contra" groups in Nicaragua, 
causes major scandal in United States. 

Iran-Iraq war ends with cease-fire, after about 1 million casual- 
ties and major shifts in regional politics; reform factions gain 
seats in parliamentary elections. 

Khomeini appoints Expediency Council composed of 12 ex-offi- 
cio members and his own representative, with wide powers to 
resolve differences between the Majlis and Guardians Council. 

Khomeini issues a fatwa against Salman Rushdie for his novel The 
Satanic Verses, deemed insulting to the Prophet. 

Khomeini dies. Hojjatoleslam Ali Khamenei succeeds him as 
Leader of the Revolution. 

Ali Akbar Hashemi Rafsanjani elected president. 

Large-scale protests against economic conditions begin, con- 
tinue through early 1990s. 

Iran asserts sovereignty over southern half of Persian Gulf island 
of Abu Musa, in violation of a 1971 Memorandum of Under- 
standing, thus beginning a territorial dispute with the United 
Arab Emirates. 

Rafsanjani reelected president, with declining support. 

Russia agrees to assume construction of nuclear reactors at 
Bushehr. 

Iran-Libya Sanctions Act (ILSA) passed by the U.S. Congress 
places economic sanctions on Iran. 

Election of Mohammad Khatami as president, at the head of a 
reform movement; in ensuing years, struggle heightens in courts 
and parliament between reformist and conservative factions. 

Iran announces first test-firing of Shahab-3 ballistic missile. 

First local elections since the Revolution are held. 



XIX 



Table A. Chronology of Important Events (Continued) 



February 2000 

TWENTY-FIRST CENTURY 
March 2001 

June 2001 

September 2001 

2002 

January 2002 

February 2003 

March 2003 

May 2003 
July 2003 

October 2003 
December 2003 
February and May 2004 

September 2004 

March 2005 

June 2005 

October 2005 
April 2006 

June 2006 

December 2006 
March 2007 

May 2007 

August 2007 



Guardians Council disqualifies large numbers of reformist candi- 
dates for parliamentary elections, but reformists make significant 
gains. 



Russia agrees to complete nuclear reactor construction at 
Bushehr. 

Khatami wins second term as president, but conservatives retain 
control of Guardians Council. 

Iranian officials express deep sympathy with the United States 
following the terrorist attacks of September 11. 

Iran continues to support Northern Alliance forces in Afghani- 
stan in successful anti-Taliban campaign. 

Repression of press and dissident activities increases in Iran; stu- 
dent demonstrators are arrested. 

Israel intercepts the freighter Karine A in the Mediterranean Sea. 
The ship was carrying Iranian weapons believed to be bound for 
the Palestinian Authority. U.S. President George W. Bush links 
Iran with Iraq and North Korea in an "axis of evil." 

Conservatives make large gains in local elections. 

International Atomic Energy Administration (IAEA) begins 
examination of Iran's nuclear program. 

United States deposes Saddam Hussein in Iraq; Iran opposes 
ensuing occupation but remains neutral. 

Guardians Council vetoes key reform legislation of Khatami. 

Death of a Canadian journalist in an Iranian jail causes interna- 
tional outcry. 

Human rights lawyer Shirin Ebadi wins the Nobel Peace Prize. 

Earthquake destroys the Iranian city of Bam. 

After many reformist candidates are disqualified, conservatives 
gain a parliamentary majority in elections. 

Three new provinces, North Khorasan, South Khorasan, and 
Razavi Khorasan, are created from the province of Khorasan. 

United States offers economic incentives for Iran to suspend ura- 
nium enrichment. 

In a runoff election, Mahmoud Ahmadinejad is elected presi- 
dent with a populist platform. 

Iran reconfirms its right to develop peaceful nuclear technology. 

IAEA officially reports Iran's failure to suspend uranium enrich- 
ment, as mandated by the United Nations (UN) Security Coun- 
cil. 

United States offers to join talks on Iran's nuclear program; 
international powers offer new incentives for Iran to suspend 
uranium enrichment. 

UN Security Council imposes limited sanctions on Iran. 

UN Security Council widens scope of the December 2006 sanc- 
tions against Iran. 

U.S. and Iranian negotiators meet, for first time in 27 years, to 
discuss stability in Iraq. 

Iran and the IAEA reach agreement on a timetable according to 
which Iran will allow IAEA inspectors to resume inspecting 
declared nuclear sites. 



XX 



Chronology 



Table A. Chronology of Important Events (Continued) 



October 2007 



November 2007 



March 2008 



Iran's chief nuclear negotiator (Ali Larijani) resigns and is 
replaced by a close associate of President Ahmadinejad. 

United States unilaterally imposes tougher new economic sanc- 
tions on Iran, focusing on the Revolutionary Guards, Ministry of 
Defense, and a number of Iranian individuals, banks, and com- 
panies. 

An official U.S. government intelligence report concludes that 
Iran likely ceased work on its nuclear weapons program in 2003, 
although uranium enrichment continued. 

Ahmadinejad is the first Iranian president since the Revolution 
to visit Iraq. 

UN Security Council tightens existing economic sanctions 
against Iran. 



xxi 



Country Profile 




Country 

Formal Name: Islamic Republic of Iran. 
Short Form: Iran. 
Term for Citizen(s): Iranian (s). 
Capital: Tehran. 

Other Major Cities (in order of population): Mashhad, Esfahan, 
Tabriz, Karaj, Shiraz, Qom, and Ahvaz. 

Independence: In the modern era, Iran has always existed as an 
independent country. 



xxiii 



Historical Background 



The first Iranian state was the Achaemenian Empire, which was 
established by Cyrus the Great in about 550 B.C. Alexander the 
Great conquered the empire in 330 B.C. The Arabs conquered 
Iran in A.D. 642, bringing with them Islam, which eventually 
became the predominant religion. In the centuries that followed, 
Iran was ruled by a succession of Arab, Iranian, Turkic, and 
Mongol dynasties. In 1501 the Iranian Safavis created a strong 
centralized empire under Ismael I and established Shia Islam as 
the official religion. 

In 1795 the Qajar family established a dynasty that would rule Iran 
until 1925. In the nineteenth century, Iran lost much of its 
territory to Russia. The Constitutional Revolution of 1905-7 led to 
the formation of Iran's first parliament. When the Qajar dynasty 
was overthrown in 1925, Reza Khan established the Pahlavi 
dynasty, which ruled until 1979 under Reza Shah Pahlavi, as Reza 
Khan was renamed, and his son, Mohammed Reza Shah Pahlavi. 

In the 1960s, the authoritarian rule of the shah provoked political 
discontent, and the cleric Ayatollah Ruhollah Musavi Khomeini 
developed an antigovernment movement. The movement grew 
into a nationwide revolution in 1978, toppling the shah. In 1979 
Khomeini took the position of Leader in the newly established 
Islamic Republic of Iran. That year the occupation of the U.S. 
embassy in Tehran and the taking hostage of 53 U.S. diplomats 
led to a decisive break in U.S.-Iranian relations. Between 1980 
and 1988, Iran fought an indecisive, costiy war with Iraq. 

The death of Khomeini in 1989 began a period of struggle among 
political factions in Iran. The presidencies of moderates Ali Akbar 
Hashemi Rafsanjani (1989-97) and Mohammad Khatami (1997- 
2005) encountered strong resistance from radical elements. 
Conservatives regained control of the parliament in the 2004 
elections, and the election in 2005 of Mahmoud Ahmadinejad as 
president strengthened the conservative hold on government. In 
the early 2000s, Iran's international relations were eroded by 
ostensible support of terrorist groups in the Middle East, 
controversy over Iran's nuclear program, and Ahmadinejad's 
confrontational rhetoric. 



xxiv 



Geography 



Size and Location: Iran, which occupies nearly 1.65 million 
square kilometers, is located in the Middle East, between Turkey 
and Iraq on the west and Afghanistan and Pakistan on the east. 

Topography: Iran has rugged mountain chains surrounding 
several basins collectively known as the Central Plateau, which 
has an average elevation of about 900 meters. East of the Central 
Plateau are two large desert regions. Lowland areas are located 
along the Caspian coast, in Khuzestan Province at the head of the 
Persian Gulf, and at several dispersed locations along the Persian 
Gulf and Gulf of Oman coasts. Iran has no major rivers. The only 
navigable river is the Karun. 

Climate: Iran's climate is mostly arid and semi-arid, with a humid 
rain-forest zone along the Caspian coast. 

Natural Resources: Iran has enormous reserves of oil and 
natural gas. Oil reserves are estimated at more than 130 billion 
barrels (third in the world behind Saudi Arabia and Iraq; about 
11 percent of world proven reserves) and natural gas reserves at 
more than 32 trillion cubic meters (second in the world behind 
Russia) . Mineral resources currently exploited include bauxite, 
chromium, coal, copper, gold, iron ore, limestone, red oxide, 
salt, strontium, sulfur, turquoise, and uranium. About 11 percent 
of Iran's land surface is classified as arable. The most productive 
agricultural land, bordering the Caspian Sea, makes up about 
5.5 percent of the country's total land. 

Environmental Factors: Especially in urban areas, vehicle 
emissions, refinery operations, and industrial effluents contribute 
to poor air quality. Tehran is rated as one of the world's most 
polluted cities. Much of Iran's territory suffers from desertification 
and/or deforestation. Industrial and urban wastewater runoff has 
contaminated rivers and coastal waters and threatened drinking 
water supplies. Iran has not developed a policy of sustainable 
development because short-term economic goals have taken 
precedence. 

Society 

Population: Iran's population is about 70 million according to 
preliminary data from the decennial census conducted in late 



xxv 



2006; of that number, approximately one-third is rural and two- 
thirds urban. Urbanization has been steady. Population density 
averages 42 people per square kilometer, but with significant 
regional variations. The annual population growth rate was about 
1 percent in 2006. According to a 2007 estimate, 23.2 percent of 
Iran's population was 14 years of age or younger, and 5.4 percent 
was 65 or older; the population was about 51 percent male. In 
2007 life expectancy was 69.1 years for men, 72.1 years for women. 
The birthrate was 16.6 per 1,000 and the death rate, 5.6 per 1,000. 
Between 1979 and 2007, the fertility rate decreased from about 7.0 
to 1.7 children born per woman. 

Ethnic Groups and Languages: The main ethnic groups in Iran 
are Persians (65 percent), Azerbaijani Turks (16 percent), Kurds 
(7 percent), Lurs (6 percent), Arabs (2 percent), Baluchis (2 
percent), Turkmens (1 percent), Turkish tribal groups such as the 
Qashqai (1 percent), and non-Persian, non-Turkic groups such as 
Armenians, Assyrians, and Georgians (less than 1 percent). 
Persian, the official language, is spoken as a mother tongue by at 
least 65 percent of the population and as a second language by a 
large proportion of the remaining 35 percent. Other languages in 
use are Azeri Turkish and Turkic dialects, Kurdish, Luri, Arabic, 
and Baluchi. 

Religion: The constitution declares Shia Islam to be the official 
religion of Iran. At least 90 percent of Iranians are Shia Muslims, 
and about 8 percent are Sunni Muslims. Other religions present 
in Iran are Christianity (more than 300,000 followers), the Baha'i 
faith (at least 250,000), Zoroastrianism (about 32,000), and 
Judaism (about 30,000) . The constitution recognizes Christianity, 
Zoroastrianism, and Judaism, but not the Baha'i faith, as 
legitimate minority religions. 

Education and Literacy: In 2003 the. literacy rate of the 
population was 79.4 percent (85.6 percent for males and 73 
percent for females). Under the constitution, primary education 
(between ages six and 10) is compulsory, and primary enrollment 
was nearly 98 percent in 2004. Secondary school attendance is 
not compulsory. Hence, enrollment rates are lower — about 90 
percent for middle school and 70 percent for high school in 
2004. Primary, secondary, and higher education is free, although 
private schools and universities charge tuition. The majority of 
Iran's 113,000 pre-collegiate public schools are single-sex beyond 
kindergarten. Universities are coeducational. By 2004, Iran had 



xxvi 



more than 200 public and more than 30 private institutions of 
higher education, enrolling a total of nearly 1.6 million students. 

Health: The overall quality of public health care improved 
dramatically after the 1978-79 Revolution because public health 
has been a top government priority. Most Iranians receive 
subsidized prescription drugs and vaccinations. An extensive 
network of public clinics offers basic care, and the Ministry of 
Health operates general and specialty hospitals. In large cities, 
well-to-do persons use private clinics and hospitals that charge 
high fees. In the early 2000s, estimates of the number of 
physicians varied from 8.5 to 11 per 10,000 population. There 
were about seven nurses and 11 hospital beds per 10,000 
population. Some 650 hospitals were in operation. In the early 
2000s, the main natural causes of death were cardiovascular 
disease and cancer. Opium and other drug addictions constitute 
a growing health problem. 

Welfare: Iran's Ministry of Social Affairs supervises public 
programs for pensions, disability benefits, and income for minor 
children of deceased workers. Welfare programs for the needy are 
managed by more than 30 public agencies and semi-state 
organizations, as well as by several private nongovernmental 
organizations. In 2003 the government began to consolidate its 
welfare organizations in an effort to eliminate redundancy and 
inefficiency. The largest welfare organization is the Bonyad-e 
Mostazafin (Foundation of the Disinherited), a semi-public 
foundation that operates a variety of charitable activities. 



Economy 

Overview: Iran's economy is dominated by the oil industry, which 
is part of the state sector. In the early 2000s, more than 80 
percent of export earnings came from oil and gas. The state also 
owns and administers several large industries. The private sector 
includes automobile, textile, metal manufacturing, and food- 
processing factories as well as thousands of small-scale enterprises 
such as workshops and farms. Smuggling and other illegal 
economic activities occupy an increasingly large part of the 
overall economy. Traditional import-export merchants, 
collectively known as the bazaar, occupy an influential place in 
economic policy making. Government economic planning is 
done in five-year development plans, the fourth of which began 



xxvii 



in March 2005. Although economic diversification has been a 
goal in the early 2000s, little progress has been made in that 
direction. 

Gross Domestic Product (GDP): In 2006 Iran's GDP was 
estimated at US$194.8 billion, an increase of about 6 percent 
over the 2005 figure, yielding about US$2,978 per capita. Sendees 
contributed 47.1 percent, industry 41.7 percent, and agriculture 
11.2 percent of GDP. 

Inflation: The government's anti-inflationary policies have 
reduced inflation from the average rate of 23 percent in the 1977- 
98 period. The official rate for 2006 was 15.8 percent. 

Agriculture: Iran's diversity of terrain and climate enable 
cultivation of a variety of crops, most notably wheat, barley, rice, 
pistachio nuts, cotton, sugar beets, and sugarcane. Because of 
droughts, the area under cultivation has decreased since 2000, 
and Iran depends on imports for some of its grains and other 
food items. About one-third of agricultural income comes from 
livestock, chiefly chickens, sheep, beef cattle, and dairy cows. 

Mining and Minerals: In 2006 Iran produced more than 15 
different nonradioactive metals and 27 nonmetal minerals. The 
mined products yielding the greatest value were iron ore, 
decorative stones, gravel and sand, coal, copper ore, and 
limestone. The fastest growing nonpetroleum extraction industry 
is copper. Iran has an estimated 4 percent of the world total of 
copper. 

Industry and Manufacturing: Iran's most important industries are 
those associated with the extraction and processing of oil and gas. 
The petrochemicals industry has grown rapidly in the early 2000s; 
the Fourth Economic Development Plan (2005-10) calls for a 
major expansion of annual petrochemical output, from 9 million 
tons in 2001 to 27 million tons in 2015. The steel industry, 
centered in Ahvaz, Esfahan, and Mobarakeh, also has grown 
rapidly since 1990. Automobile manufacture has benefited from 
licensing agreements with European and Asian manufacturers. 
Processing of agricultural products and production of textiles 
also are important industries. The construction industry has 
grown rapidly since 2000 because of government investment in 
infrastructure projects and increased demand for private 
housing. 



xxviii 



Energy: Oil output averaged 4 million barrels per day in 2006, but 
infrastructure is aging. Natural gas output in 2006 was 105 billion 
cubic meters. A large share of Iran's natural gas reserves are 
believed to remain untapped, and massive government 
investments are planned in that sector. In 2004 Iran's electric 
power plants had a total installed capacity of more than 39,000 
megawatts. Of that amount, in 2006 about 50 percent was based 
on natural gas, 18 percent on oil, and 6 percent on hydroelectric 
power. New gas-fired and hydroelectric plants are planned to 
meet Iran's fast-growing power demand. The first nuclear power 
plant at Bushehr may come on line in 2008 after a series of delays. 

Services: In the financial sector, the Central Bank of Iran, also 
known as Bank Markazi, oversees all state and private banks. 
Wealthy Iranians use foreign banks, especially for savings 
accounts. The Fourth Five-Year Economic Development Plan 
(2005-10) calls for the introduction of foreign banks, but such a 
move has met with substantial resistance. The trading of shares 
on the Tehran Stock Exchange was limited in the post-Revolution 
years, but activity has increased sharply since 2002. Beginning in 
the 1990s, Iran's tourism industry has revived after being 
decimated during the Iran-Iraq War. 

Labor: In mid-2007 an estimated 14 percent of Iran's labor force 
was unemployed; the unemployment rate was much higher 
among younger workers, and underemployment was common. 
Skilled labor has been in short supply. In 2004 some 47.7 
percent of the labor force was employed in services, 30.6 percent 
in industry, and 21.7 percent in agriculture. In 2005 the 
minimum wage was about US$120 per month. 

Foreign Economic Relations: The Iran Sanctions Act, in existence 
since 1996 and until 2006 known as the Iran-Libya Sanctions Act, 
is a full U.S. trade embargo against Iran. Other countries, 
including members of the European Union (EU), have 
continued trade with Iran, but Western countries have blocked 
the export to Iran of dual-use items. In the early 2000s, China 
emerged as an important trade partner in both imports and 
exports. Japan retained the position that it assumed in the mid- 
1990s as Iran's best export customer. In order of volume, the 
main purchasers of Iran's exports in 2006 were Japan, China, 
Italy, Turkey, and South Korea. In order of volume, the main 
source countries for Iran's imports in 2006 were Germany, China, 
the United Arab Emirates, South Korea, and France. The main 



xxix 



commodities imported are basic manufactures, chemicals, food 
(chiefly rice and wheat), and machinery and transport 
equipment. The main commodities exported are petroleum, 
carpets, chemical products, fruit and nuts, iron and steel, natural 
gas, and copper. 

Trade Balance: In 2006 Iran's estimated income from exports 
was US$63 billion, 85 percent of which came from petroleum 
and natural gas. The estimated payment for imports in 2006 was 
US$45 billion, yielding a trade surplus of US$18 billion. 

Balance of Payments: In 2006 Iran's current account balance, 
determined mainly by its merchandise trade surplus and its 
smaller services trade deficit, was US$13.3 billion. Its foreign 
exchange reserves, determined primarily by oil prices, were 
estimated at US$58.5 billion. 

External Debt: Since 2001 Iran's foreign debt has risen as 
international borrowing has increased. In mid-2006 the estimate 
was US$18.6 billion, compared with US$10.2 billion in 2003. 

Foreign Investment: Foreign investment has been hindered by 
unfavorable or complex operating requirements in Iran and by 
international sanctions, although in the early 2000s the Iranian 
government liberalized investment regulations. Foreign 
investors have concentrated their activity in a few sectors of the 
economy: the oil and gas industries, vehicle manufacture, 
copper mining, petrochemicals, foods, and pharmaceuticals. 
The most active investors have been British, French, Japanese, 
South Korean, Swedish, and Swiss companies. 

Currency and Exchange Rate: The value of the rial, Iran's unit of 
currency, declined substantially between 2002 and 2007. In 2002 
a multiple exchange rate was replaced by a single floating rate. 
In late February 2008, the exchange rate was about 9,400 rials to 
the U.S. dollar. The tuman, which is worth 10 rials, is the 
preferred unit of currency in commerce. 

Fiscal Year: In accordance with the Iranian calendar, the fiscal 
year begins March 21. 



xxx 



Transportation and Telecommunications 

Roads: In 2003 Iran had a total of 100,000 kilometers of paved 
roads and nearly 80,000 kilometers of graded, unpaved roads. 
The three national auto routes are the A-l across northern Iran, 
the A-2 across southern Iran, and the Tehran-Qom-Esfahan- 
Shiraz highway, which traverses central Iran from north to south. 

Railroads: The rail system, which originally was constructed in 
the 1920s and 1930s, has been undergoing constant expansion 
since 1989. In 2006 Iran had a total of 8,367 kilometers of rail 
line. Only 13 of Iran's 30 provinces had railroad service in the 
early 2000s. The five main lines of the national system radiate 
from Tehran. Tehran also has a combined underground and 
surface rail commuter system. 

Ports: In 2004 about 53 million tons of cargo were unloaded and 
30 million tons loaded at Iran's 14 ports. More than one-third of 
total traffic came through Bandar-e Abbas on the Strait of 
Hormuz. The main oil terminal is on Khark Island in the 
northeastern Persian Gulf. Since 1992, Caspian ports have 
handled more trade as commerce with the Central Asian 
countries has increased. Modernization projects are underway in 
Bandar-e Anzali on the Caspian Sea and Chabahar on the Gulf of 
Oman. 

Inland Waterways: In 2006 Iran had 850 kilometers of inland 
waterways. The most important is the 193-kilometer-long Shatt al 
Arab (Arvanrud in Persian), which is formed in Iraq by the 
confluence of the Tigris and Euphrates rivers and then forms the 
Iran-Iraq border until it flows into the Persian Gulf. The ports of 
Abadan and Khorramshahr are located along the Shatt al Arab. 

Civil Aviation and Airports: In 2006 Iran had 321 airports, 129 of 
which had paved runways. Of those, 41 had runways 3,000 meters 
or longer. International airports are located at Tehran, Tabriz, 
Mashhad, Bandar-e Abbas, Bushehr, Esfahan, and Shiraz, and on 
the islands of Kish in the Persian Gulf and Qeshm in the Strait of 
Hormuz. Some 15 heliports also were in operation. In 2006 the 
national airline, Iran Air, served 25 cities in Iran with connections 
to the Persian Gulf and European and Asian cities. 

Pipelines: In 2006 Iran had 17,099 kilometers of natural gas 
pipelines, 8,521 kilometers of oil pipelines, 7,808 kilometers of 
pipelines for refined products, 570 kilometers of pipelines for 



xxxi 



liquid petroleum gas, and 397 kilometers of pipelines for gas 
condensate. In 2007 a new 160-kilometer line to Armenia began 
operations. However, a 2,600-kilometer line to Pakistan, which 
potentially also could supply India, remained under negotiation. 

Telecommunications: Most phases of telecommunications 
services are controlled by the state. Between 1995 and 2006, the 
number of telephone land lines increased from 86 to 330 per 
1,000 population. A large-scale modernization program has 
aimed at improving and expanding urban service and reaching 
rural areas. In 2006 an estimated 13.7 million subscribers had 
mobile telephone service. In 2005 an estimated 7.5 million 
Iranians had access to the Internet. However, the state filters 
Internet content intensively. 

Government and Politics 

Political System: The Islamic Revolution of 1978-79 established 
the Islamic Republic of Iran as a republic with nominal 
separation of powers among the executive, judicial, and 
legislative branches. The senior figure in the system is the faqih, 
an expert in religious law, who is referred to in the constitution as 
the Leader of the Revolution (Leader) . Leaders are elected by a 
majority vote of the Assembly of Experts, a body of senior 
clergymen who are elected in national elections. The legal system 
is based on sharia (Islamic law). 

Executive Branch: The Leader, who exercises many de facto 
executive functions, is elected by a majority vote of the Assembly 
of Experts, an 86-member body of senior clergymen who are 
elected by popular vote to eight-year terms. The Leader chooses 
the commanders of the military- services and the head of the 
judiciary, sets general state policy, declares war and peace, and 
commands the armed forces. The executive branch is headed by 
the president, who in practice is the second-highest government 
official. He is elected in national elections every four years and is 
limited to two consecutive terms. The current president, 
Mahmoud Ahmadinejad, was elected in 2005. The president 
selects several vice presidents and the 21 cabinet ministers. 

The relationship between the president and the Leader, not well 
defined by the constitution, has varied with the personalities in 
power. In the early 2000s, the reluctance of Ahmadinejad's 



xxxii 



moderate predecessor, Muhammad Khatami, to engage in 
confrontational politics enabled conservatives to strengthen the 
office of the Leader. In his early presidency, Ahmadinejad took 
a bolder position vis-a-vis the Leader. 

Legislative Branch: The legislative branch consists of a 
parliament, or Majlis, and the Guardians Council. The 290 Majlis 
deputies are elected directly to four-year terms. The speaker 
presides over parliament, assisted by two deputies and 22 
permanent committees. The Majlis may both propose and pass 
legislation, and the executive branch cannot dissolve it. All bills 
passed by the Majlis must be reviewed by the 12-member 
Guardians Council, which is appointed by the Leader and the 
Majlis. If the Guardians Council finds a bill unconstitutional or 
un-Islamic, the bill is sent back to the Majlis for revision. The 
Expediency Council resolves disputes between the Majlis and the 
Guardians Council. In practice, the Expediency Council has 
divided its decisions between the two bodies. 

Judicial Branch: The highest judicial authority is the Supreme 
Court. The head of the judiciary, who is appointed to a five-year 
term by the Leader, appoints members of the Supreme Court. 
The court nominally has 33 regional branches, to which its chief 
assigns cases, but all but two are located in Tehran. The Supreme 
Court oversees enforcement of the laws by lower courts, sets 
judicial precedent, and acts as a court of appeal. Public courts try 
conventional civil and criminal cases at province and local levels. 
Revolutionary courts try cases involving political offenses and 
national security. The Clerical Court, overseen directly by the 
Leader, deals with crimes committed by members of the clergy, 
including misinterpretation of religious precepts. Iran also has 
special courts for members of the security forces and government 
officials. The judges of all courts must be experts in Islamic law. 

Administrative Divisions: Iran is divided into 30 provinces, which 
are subdivided into counties (321 in 2007), districts, and villages. 

Provincial and Local Government: Each province is administered 
by a governor general appointed by the central government. The 
governor general, in consultation with the Ministry of Interior, 
then appoints the governor of each county in the province and, in 
consultation with the latter, the chief of each district. At the local 
level, directly elected city and village councils have exerted 
substantial authority since the first local elections in 1999. 
Conservative candidates swept most of the local council elections 



xxxiii 



held in 2003, but moderates won the majority of local council 
seats in the 2007 elections. 

Judicial and Legal System: Although the constitution provides for 
an independent judiciary, in practice the judicial branch is 
influenced strongly by political and religious institutions. 
Defendants have the right to public trial, choice of a lawyer, and 
appeal. Judicial authority is concentrated in the judge, who also 
acts as prosecutor and investigator with no legal counsel. In the 
early 2000s, reformers tried unsuccessfully to gain Majlis approval 
for the introduction of jury trials. The Islamic revolutionary 
courts have authority to hold suspects on unspecified charges 
without the benefit of counsel. 

Electoral System: Suffrage is universal at age 16. Direct elections 
every four years choose the Majlis, the president, and local 
councils. The Ministry of Interior and a committee of the 
Guardians Council vet candidates for direct election to national 
offices. Local boards supervise elections at the lowest 
governmental levels. The selection process favors candidates 
demonstrating strong loyalties to the Revolution and Islamic law. 
In recent elections, the Guardians Council has used its vetting 
capacity to disqualify a high percentage of reformist candidates. 

Politics and Political Parties: Political parties were legalized in 
1998. However, official political activity is permitted only to 
groups that accept the principle of political rule known as velayat- 
e faqih, literally, the guardianship of the faqih (religious jurist). 
Allegiances, still based on special interests and patronage, remain 
fluid. In 1998, 18 parties joined in a broad coalition called the 
Second of Khordad coalition. All were reformist parties that 
supported the political and economic proposals of President 
Mohammad Khatami; in the early 2000s, internal differences 
over specific economic policies hampered the coalition's 
effectiveness, however. During that period, the conservatives were 
more united, despite the existence of several major conservative 
parties. The Islamic Iran Builders Council (known as Abadgaran) 
emerged as a powerful conservative coalition beginning in 2003, 
leading the conservatives to victory in the 2004 parliamentary 
elections and the 2005 presidential election. 

Mass Media: The constitution guarantees freedom of the press, 
provided that published material complies with Islamic 
principles. Freedom of speech is not guaranteed. In 1997 and 
1998, publishing restrictions were relaxed, but since that time 



xxxiv 



reformist publications have encountered various legal and illegal 
obstacles. The newspapers with the largest circulation are 
published in Tehran and include the conservative Jomhuri-e Islami 
(Islamic Republic), Kayhan (World), and Resalat (Prophetic 
Mission). The state news service is the Islamic Republic News 
Agency, which publishes the English-language Iran Daily. Several 
foreign news agencies maintain offices in Tehran. Radio and 
television broadcasting is controlled by the state. 

Foreign Relations: The election of Mohammad Khatami as 
president in 1997 led to improved relations with Iran's neighbors 
and with most of the West, excluding Israel and the United 
States. The Khatami government stressed commercial and 
geopolitical relations with Western Europe and Japan. However, 
in the early 2000s, the regime failed to normalize bilateral 
relations with the United States. The Bush administration's 
inclusion of Iran as part of an "axis of evil" in 2002 brought 
relations to a new low in the post-1989 period. Beginning in 2004, 
relations deteriorated further because U.S. officials believe that 
Iran intends to develop a nuclear weapons program and actively 
supports insurgent activity in various parts of the Middle East. 
The nuclear issue also caused relations with Europe to decline in 
this period. 

Since the overthrow of Iraqi President Saddam Hussein in 2003, 
Iran has established cooperative relations with the Shia- 
dominated government of Iraq. In the early 2000s, relations with 
other regional Arab countries have varied. Iran has had relatively 
good relations with China, India, and Russia, particularly in the 
area of military cooperation. Relations with neighbors Pakistan 
and Turkey have been correct but not close. 

National Security 

Armed Forces Overview: In 2007 the armed forces, under a 
unified command with the Leader as commander in chief, 
included about 420,000 active personnel in the regular forces 
and 125,000 in the auxiliary Islamic Revolutionary Guard Corps. 
Iran has eschewed military alliances, although it has reached 
military supply agreements with a number of countries. 
Modernization of the navy, seen as vital for protecting interests in 
the Persian Gulf, is a high priority. Technology purchased from 
North Korea and China, and refined by the domestic defense 



xxxv 



industry, supports a growing missile force that is considered the 
most important element of air defense policy. In 2001 Iran signed 
a 10-year military-technical agreement with Russia that included 
assistance in aircraft maintenance and design estimated to be 
worth US$4 billion. 

Defense Budget: Iran's defense budget for 2006 was estimated at 
US$6.6 billion, which was a significant increase over the 2005 
level of US$5.6 billion. The 2004 budget was US$3.3 billiion. 

Major Military Units: In 2007 the army had about 350,000 active 
personnel assigned to four armored divisions, six infantry 
divisions, two commando divisions, one airborne brigade, one 
special forces brigade, and six artillery groups. The navy had 
about 18,000 active personnel in 2006, of whom 2,600 were in 
naval aviation and 2,600 in marine units. The navy operates bases 
at Bandar-e Abbas, Bushehr, Khark Island, Bandar-e Anzali, 
Bandar-e Khomeini, Bandar-e Mah Shahr, and Chabahar. The air 
force had about 52,000 active personnel in 2006, including 
15,000 assigned to air defense units. Air force combat forces were 
organized in nine ground-attack fighter squadrons, five fighter 
squadrons, and one reconnaissance squadron. 

Major Military Equipment: In 2006 the army had 1,613 main 
battle tanks, 610 armored infantry fighting vehicles, 640 armored 
personnel carriers, 2,010 pieces of towed artillery, 310 pieces of 
self-propelled artillery, 876 multiple rocket launchers, 5,000 
mortars, 75 antitank guided weapons, 1,700 antiaircraft guns, and 
50 attack helicopters. The navy had 3 submarines, 3 frigates, 140 
patrol and coastal combatants, 5 mine warfare vessels, and 13 
amphibious vessels. The air force ground-attack fighter units had 
F-4D, F-4E, F-5E, Su-24MK, Su-25K, and Mirage F-1E aircraft; 
the fighter units had F-14, F-7M, and MiG-29A aircraft. The air 
force also had 34 helicopters. 

Military Service: Males are legally eligible for conscription 
between ages 18 and 50, for an active service term of 18 months. 
Individuals may volunteer for active duty at age 16. 

Paramilitary Forces: The volunteer paramilitary force, the 
Popular Mobilization Army, or Basij, includes an estimated 
300,000 personnel (40,000 active), mainly youths, with an 
estimated capability to expand to 1 million if needed. The Basij 
are under the authority of the Islamic Revolutionary Guard Corps. 



xxxvi 



Police: About 40,000 police serve under the Ministry of Interior, 
including border patrol personnel. The Police-110 unit 
specializes in rapid-response activities in urban areas and 
dispersing gatherings deemed dangerous to public order. 

Internal Threat: Despite strong government countermeasures, 
Iran is a main transit country for narcotics from neighboring 
Afghanistan and Pakistan and destined for Europe, Central Asia, 
and the Gulf region. Considerable quantities of these narcotics 
are sold illegally in Iran and are the main source of a serious and 
growing addiction problem. In the early 2000s, other types of 
smuggling increased rapidly, especially in Iran's impoverished 
border provinces. Corruption in the border police is a major 
factor in this trade. 

Human Rights: International human rights organizations have 
cited major abuses in Iran's judicial system, including arbitrary 
arrest, lack of due process, denial of access to attorneys, 
restrictions on family visits, prolonged periods in solitary 
confinement, and inhumane punishments in unofficial 
detention centers. Prison conditions are poor, particularly 
regarding food and medical care. The government controls all 
television and radio broadcast facilities. Domestic and foreign 
publications and films are censored. The state also filters Internet 
content. Members of religions not specifically protected by the 
constitution (Christianity, Islam, Judaism, and Zoroastrianism), 
such as members of the Baha'i faith, do not have full rights to 
assemble and may be subject to discrimination and even 
persecution. Marriage law discriminates against women in 
divorce, child custody, and inheritance from deceased spouses. 
Although women have equal access to education, social and legal 
conditions limit their professional activities. 



xxxvii 



7^% 




\ UZBEKISTAN 



TURKMENISTAN 



Caspian Sea 



/ 
Gorgant 



28 ' 
Bojnurd 



Tehran 
1 



Mashhad 
29 



Kermanshatii 
12 ® 



//am (~Khorramabad 

N 

\ 



24 

. Esfahan 



Shahr-iKord 
15 



^Shiraz 
19 



\ AFGHANISTAN 



Zahedan^. " — . •- — "H 
\ PAKISTAN 



International boundary 

Province boundary 

* National capital 

® Province capital 

50 100 150 Kilometers 



50 100 150 Miles 





OMAN 

Qtdj of Oman 





Provinces of Iran 




1 . Tehran 


1 1 . Hamadan 


21 . Sistan va Baluchistan 


2. Qom 


12. Kermanshah 


22. Kerman 


3. Markazi 


13. Ham 


23.Yazd 


4. Qazvin 


1 4. Luristan 


24. Esfahan 


5. Gilan 


15. Khuzestan 


25. Semnan 


6. Ardabil 


16. Chahar Mahall va Bakhtiari 


26. Mazandaran 


7. Zanjan 


17. Kohgiluyeh va Buyer Ahmadi 


27. Golestan 


8. East Azarbaijan 


18. Bushehr 


28. North Khorasan 


9. West Azarbaijan 


1 9. Fars 


29. Razavi Khorasan 


10. Kurdistan 


20. Hormozgan 


30. South Khorasan 



Figure 1. Administrative Divisions 



xxxviii 



Introduction 



CONTEMPORARY IRAN is a country whose people retain 
memories of legendary heroes and rulers, some of whom lived 
more than two millennia ago. Its national language, Persian, is 
equally ancient as a written tongue. Some customs, such as the 
annual New Year's celebrations that are observed on the spring 
equinox, also have their roots deep in history. The religion of 
at least 98 percent of Iranians is Islam, which initially was 
brought into Iran by Arabs in the mid-seventh century. Thus, 
history, Persian literature, cultural traditions, and Islam have 
been longtime and persistent influences on Iran. Although the 
Islamic Revolution of 1978-79 led to the creation of the Islamic 
Republic, an event that marked a break with the long political 
tradition of rule by monarchs (shahs) and institutionalized a 
dominant political role for the Shia (see Glossary) clergy, Iran's 
development otherwise has demonstrated numerous continu- 
ities with its pre-1979 past. 

Iranians generally consider their ancient history as a period 
of national greatness, while they view their more recent history, 
especially the 150 years preceding the 1978-79 Revolution, as a 
time of national humiliation and foreign intervention. Ancient 
Iranians, also known as Persians, organized three powerful 
empires — the Achaemenian (550-330 B.C.), Parthian (247 
B.C.-A.D. 224), and Sassanian (A.D 224-642). At their heights, 
those empires extended east into modern Afghanistan and 
Central Asia and west as far as Anatolia and the Mediterranean 
Sea. Following the overthrow of the Sassanian dynasty by Arab 
armies, Iran did not exist as an independent polity for 850 
years. Nevertheless, between the eighth and twelfth centuries 
Iranian Muslim scholars contributed to the development of 
classical Sunni Islam, and by the eleventh century modern Per- 
sian had acquired equal status with Arabic as a language of cul- 
ture throughout most of the Islamic world. 

After Shah Ismail Safavi reestablished it as an independent 
country in 1501, Iran was a major power for the next two centu- 
ries. Ismail also established Shia Islam as the official religion, 
thus setting Iran apart from the predominantly Sunni Islamic 
world. By 1722, when the Safavi dynasty was overthrown, the 
majority of Iranians had become Shias, and the Shia denomi- 
nation of Islam has been identified closely with Iran since that 



xxxix 



time. Under the Safavis, the state and the Shia clergy main- 
tained close relations, but under later dynasties, particularly 
the Qajars (1795-1925) and Pahlavis (1925-79), the clergy 
tended to view their role as protecting the people from the 
power of the state. In fact, the clergy played a significant role in 
several major antigovernment movements, including the 
Tobacco Rebellion of 1891, the Constitutional Revolution of 
1905-7, and the Islamic Revolution of 1978-79. 

The fall of the Safavi dynasty precipitated a civil war that con- 
tinued intermittently until the Qajars established control over 
the entire country in the late 1700s. However, by the beginning 
of the Qajar dynasty Iran's status had so declined that its terri- 
torial integrity and even national sovereignty were threatened 
by the European empires of Britain and Russia. After losing 
two disastrous wars to Russia in the early nineteenth century, 
Iran's leaders sought to achieve military parity with the Europe- 
ans by adopting Western military tactics and technology. Thus 
began a national reform or Westernization project that would 
preoccupy Iran's rulers for some 90 years. The Qajars desired a 
strong state that could deter foreign threats and quell domestic 
unrest, but they also feared the destabilizing effects of exposing 
their subjects to new ideas that challenged their absolute rule. 
Because of this ambivalence toward change, the overall reform 
effort was dilatory. By the end of the nineteenth century, unrest 
was increasing among secular intellectuals, merchants, and the 
Shia clergy, who saw no improvement in Iran's resistance to for- 
eign economic and political penetration. 

Discontent culminated in the Constitutional Revolution of 
1905-7, which featured the organization of long economic 
strikes in major cities — a tactic that would be repeated 70 years 
later during the Islamic Revolution. The Constitutional Revolu- 
tion forced the shah to grant a representative assembly (the 
Majlis — see Glossary), a free press, and a constitution. But 
Iran's first experience with constitutional government exposed 
serious political differences between secular and clerical intel- 
lectuals that have persisted to the present. Secular political 
leaders wanted to apply European economic, political, and 
social principles in Iran, including strict separation of religion 
and government. Religious leaders feared that the secularists' 
reforms would undermine the role of religion in Iranian soci- 
ety. These differing perspectives paralyzed the Majlis and cre- 
ated conditions for British and Russian political interference. 



xl 



In 1921 the army officer Reza Khan provided military sup- 
port for a coup d'etat that led to far-reaching economic, politi- 
cal, and social changes. After the Majlis deposed the Qajar 
dynasty in 1925, Reza Khan became shah, taking the dynastic 
name Pahlavi. He then implemented a wholesale moderniza- 
tion program intended to return Iran to its historical stature. 
Reza Shah's economic policies transformed urban Iran, but his 
intolerance of political dissent alienated intellectuals, who had 
hoped for democratic government, and Shia clerics, who per- 
ceived his secular policies as an attack on religion. 

Reza Shah was forced to abdicate in 1941 after Britain and 
the Soviet Union, discontented with Iran's neutral position in 
World War II, invaded the country. He was succeeded by his 
son, who ascended the throne as Mohammad Reza Shah Pahl- 
avi. Reza Shah's removal led to a restoration of constitutional 
government, the re-emergence of a relatively free press, and 
the resumption of the religious-secular debates over the desir- 
ability of Westernization. In 1944 a mid-ranking cleric, Ruhol- 
lah Musavi Khomeini, authored a book denouncing the 
anticlerical policies of Reza Shah's regime and advocating a 
role for high-ranking clergy in selecting the ruler and advising 
the government on legislation. Later, in the 1970s, Khomeini 
would elaborate on these ideas and put forth his concept of 
velayat-e faqih (see Glossary). 

Meanwhile, Mohammad Reza Shah's undemocratic rule met 
increasing resistance from secular politicians, who agreed with 
his goals of modernization. Mohammad Mossadeq, the leading 
advocate of democracy in the Majlis, formed a National Front 
to promote national development and democratic politics. The 
National Front viewed the country's large, British-owned oil 
industry as a threat to Iran's independent development. With 
strong public support, the Majlis enacted an oil nationalization 
bill in 1951, and Mossadeq was named prime minister. But in 
1953 British and U.S. intelligence agencies supported a mili- 
tary coup d'etat that overthrew the Mossadeq government. 

After the 1953 coup, Mohammad Reza Shah ruled as a vir- 
tual dictator with an acquiescent Majlis. He implemented 
development programs that expanded industrialization and 
education, stimulated urbanization, and led to the creation of 
a Westernized, technocratic elite. He also firmly aligned Iran 
with the United States and its European allies in the Cold War. 
However, secular and religious opponents were unified by the 
shah's undemocratic rule and his alliance with countries identi- 



xli 



fied with the ouster of the popular Mossadeq. In 1962-64 
Khomeini achieved national prominence by his vocal opposi- 
tion to the shah's domestic and foreign policies, which led to 
his forcible exile to Turkey and later Iraq. From exile Khomeini 
formed a clandestine network of opposition to the shah's 
regime, which gradually expanded throughout the country in 
the late 1960s and during the 1970s. 

Other secular and religious opposition groups formed in the 
same period, despite repression by the shah's secret police 
organization, SAVAK (in full, Sazman-e Ettelaat va Amniyat-e 
Keshvar; Organization for Intelligence and National Security) . 
Two groups, the Marxist Fedayan (Fedayan-e Khalq, or Peo- 
ple's Warriors) and the Islamist Mojahedin (Mojahedin-e 
Khalq, or People's Fighters), initiated guerrilla warfare against 
the government in 1971, with the aim of overthrowing the 
shah's regime. Between 1976 and 1978, an increasing tide of 
intellectual, middle class, and religious opposition gradually 
coalesced into a nationwide revolutionary movement. In 1978 
the charismatic exile Khomeini led this movement through 
strikes and mass demonstrations to ultimate victory: the over- 
throw of the Pahlavi dynasty in February 1979 and the estab- 
lishment of an Islamic republic. 

The national unity that brought an end to monarchy in Iran 
began to disintegrate in the initial postrevolutionary period. 
Secular leaders did not want the clergy to exercise a political 
role in the government, but they were marginalized quickly 
because Khomeini had widespread support. A constitution 
drafted with heavy influence from Khomeini's followers 
enshrined his concept of velayat-e faqih as the basis of Iran's new 
Islamic government. Nevertheless, among religious leaders and 
their lay allies differing perspectives on the nature of Islamic 
government led to the formation of distinct political factions. 
Since the early 1990s, the two most important factions have 
been referred to as the reformists and the conservatives. In the 
early postrevolutionary years, the reformist groups advocated 
using the country's substantial oil revenues to improve social 
justice and benefit low-income people, while the conservatives 
distrusted policies for the redistribution of wealth, contending 
that an Islamic government's obligation was to protect private 
property. 

Increasingly in the postrevolutionary period, the divisive 
force of differences on domestic policy was limited by the per- 
ceived need to remain united against foreign threats. Although 



xlii 



the Revolution had demonstrated that a peaceful national 
movement based on Islamic values could overthrow a powerful 
dictator backed by a foreign superpower, the revolutionary 
leaders believed that the United States aimed to repeat the suc- 
cessful reinstatement of the shah that had occurred in 1953. 
This mindset led to the incident that has had the strongest, 
most enduring influence on U.S-Iranian "non-relations": the 
taking hostage of U.S. embassy personnel by young Iranian rad- 
icals in November 1979. 

Khomeini promoted Iran's experience as a model for move- 
ments in other countries seeking freedom from U.S. political 
influence (the Persian Gulf states, for example) and the Soviet 
Union (Afghanistan, for example). Iraq's invasion of Iran in 
September 1980, at a time when Iran still was embroiled with 
the United States in the hostage crisis, led to a traumatic eight- 
year war that ignited tremendous patriotic fervor. The general 
isolation that Iran experienced during that war reinforced the 
impression that many foreign countries opposed the Islamic 
Republic. 

The end of the war prompted the political elite to focus 
attention on reconstructing the country and normalizing Iran's 
external relations with other countries. However, Khomeini 
died barely a year later. His successor as Leader of the Revolu- 
tion, Sayyid Ali Khamenei, did not possess the latter's charisma 
or scholarly reputation, and many reformers believed he was 
against them in their factional struggle with the conservatives. 
This suspicion fostered controversy over the degree of the 
Leader's authority and political freedom in the Islamic Repub- 
lic. Although the constitution stipulates that the institutions 
and structure of government are under the supervision and 
protection of the Leader, neither it nor the first Leader, 
Khomeini, articulated specific functions of the office. Hence, 
conservatives and reformists have interpreted the Leader's 
powers differently. The reformists hold that all officials, includ- 
ing the Leader, are accountable to the people for their deci- 
sions and policies. In this conception, the Leader is a neutral 
arbiter who encourages political groups to work out compro- 
mises for the overall national good; if a Leader takes a partisan 
position, he loses legitimacy and therefore can be removed. 

The conservatives, by contrast, have seen the Leader as an 
adviser to the political leadership whenever executive or legis- 
lative decisions come into conflict with Islamic values. Many 
conservatives hold that the Leader has absolute authority in 



xliii 



protecting the public from the undesirable exercise of freedom 
of speech, such as insults to religious values and religious per- 
sonalities, and by extension to government officials and agen- 
cies. Since the late 1990s, conservatives have used this 
conception of the Leader's responsibilities to justify closing 
reformist newspapers that criticized the rulings of the Leader 
or other senior clergy. As their attitude toward the press has 
demonstrated, conservatives believe in the necessity of setting 
definite limits on the exercise of popular sovereignty. They dis- 
trust the masses, who, they suspect, would not behave in accor- 
dance with Islamic values if they were to have unfettered 
freedom. Conservatives insist that their version of Islamic 
democracy is superior to a Western-style democracy. They 
believe that in the latter every kind of religious and moral ideal 
is under attack in the name of freedom, undermining the 
moral values that bind societies together. 

Conservatives generally have seen a free press, demonstra- 
tions, political meetings, and unions as potentially disruptive of 
the social order. Centrist president Ali Akbar Hashemi Rafsan- 
jani (1989-97) oversaw a partial lifting of media and organiza- 
tional restrictions, and the administration of his successor, 
Mohammad Khatami (1997-2005), accelerated this process. 
After the conservatives had succeeded in blocking many, but 
not all, of the reforms proposed by the Khatami administra- 
tion, the extent of personal and political freedom was margin- 
ally greater in 2007 than it had been 10 years earlier. 

In 2005 Khatami was succeeded as president by a conserva- 
tive, Mahmoud Ahmadinejad, who defeated former president 
Rafsanjani in an election that extended to a second round 
when no candidate reached the minimum of 50 percent in the 
initial balloting. Although Ahmadinejad is a conservative in 
terms of political philosophy, i.e., a firm supporter of the 
notion of an authoritative /<2^'A/Leader, his ideas on social jus- 
tice issues, such as increasing subsidies for poor families, imple- 
menting programs to end poverty, increasing government 
regulation of the economy, and opposing "dependence" on 
foreign capital and investment, were not favored by the conser- 
vatives, especially those politicians with ties to the bazaar (see 
Glossary) . Consequently, the conservative-dominated parlia- 
ment succeeded in blocking most of Ahmadinejad's economic 
proposals during his first two years in office. The political dis- 
pute over economic policies was not conducive to private 
investment in the types of activities that promote job creation. 



xliv 



In fact, between the late 1990s and 2007, private investment 
remained at a low level, and in each year of that period the 
number of new job-seekers exceeded the number of available 
jobs. One result was an increasing unemployment rate among 
youth aged 16 to 25. In 2007 that rate was estimated at between 
20 and 25 percent, compared with the official overall unem- 
ployment rate of 14 percent. 

In the early part of his term, Ahmadinejad did not show par- 
ticular concern for the social issues that preoccupy the funda- 
mentalist conservatives, and he did not endorse campaigns to 
restrict or roll back the social freedoms that had become com- 
mon by the second Khatami administration. On foreign policy 
issues, however, Ahmadinejad proved very unlike the moderate 
Khatami or the pragmatic Rafsanjani. His critics in Iran 
described him as a "super-patriot sensitive to the tiniest insult 
to national pride." His handling of the nuclear energy dispute 
since 2005 has demonstrated a focus on Iran's national right to 
develop nuclear fuel technology, especially the enrichment of 
uranium, and an inability or unwillingness to comprehend the 
concerns of the International Atomic Energy Agency (IAEA) 
that such activity could lead to the production of weapons- 
grade uranium fuel. The consequent impasse over Iran's posi- 
tion prompted the IAEA in 2006 to refer Iran to the United 
Nations (UN) Security Council, where the United States advo- 
cated international sanctions against Iran to force compliance 
with UN and IAEA demands to stop the enrichment of ura- 
nium. Because not all permanent members of the Security 
Council supported the imposition of sanctions, a compromise 
was reached in June 2006 to send Iran a letter offering negotia- 
tions in return for its suspension of nuclear enrichment. The 
reply of the Ahmadinejad administration was delayed for sev- 
eral months, leaving the international community divided over 
the appropriate way to deal with Iran. Ahmadinejad took the 
position that Iran was prepared to negotiate over its nuclear 
program, but that it would not accept any pre-conditions (i.e., 
the suspension of uranium enrichment) for such talks. Within 
the country, Ahmadinejad's tough stance on the nuclear pro- 
gram garnered him widespread popular support, even among 
those Iranians who disliked his domestic economic and/or 
political policies. 

In 2007 the standoff over the nuclear issue continued. In 
defiance of international warnings, Iran expanded its uranium 
enrichment capacity and refused to provide key documenta- 



xlv 



tion on its nuclear industry requested by the IAEA. The UN 
Security Council voted to impose relatively mild sanctions on 
Iran as part of its strategy to pressure the country into comply- 
ing with IAEA inspections. The sanctions were a compromise 
between the tough measures favored by Britain, France, and 
the United States on the one hand and the lack of enthusiasm 
for any sanctions on the part of China and Russia on the other 
hand. Officials in the former countries periodically issued 
harsh statements about the dangers of a suspected secret 
nuclear program in Iran while simultaneously stressing the 
need to find a diplomatic settlement of the impasse. These tac- 
tics seemed to have achieved some results, when in August 
2007 the Ahmadinejad government and the IAEA reached 
agreement on a timetable by which Iran would provide the 
nuclear agency responses to several outstanding questions per- 
taining to its nuclear program and also allow IAEA inspectors 
to resume inspecting declared nuclear sites. However, in Octo- 
ber 2007, the resignation of Ali Larijani, Iran's chief interna- 
tional negotiator on the nuclear issue, indicated a possible 
hardening of Iran's stance. 

In November 2007, a National Intelligence Estimate by the 
U.S. government concluded that Iran likely had ceased produc- 
tion of equipment for nuclear weapons in 2003, although 
enrichment of uranium continued. Although controversial, 
that document softened international condemnation of Iran's 
nuclear program at the end of 2007. In Iran that change 
diverted attention from the international threat to the increas- 
ingly worrisome economic situation, and Khamenei expressed 
dissatisfaction with the economic policies of President 
Ahmadinejad. At the end of 2007, experts also observed other 
signs of Khamenei's diminishing support for Ahmadinejad, 
who with the Leader's tacit approval had exceeded the official 
ceremonial prerogatives of the presidency during his first two 
years in office. 

Meanwhile, in May 2007, U.S. and Iranian ambassadors to 
Iraq met in Baghdad to discuss the security situation. This 
meeting marked the first time in 27 years that diplomats from 
the two countries had met openly to discuss an issue of mutual 
concern. Their talks, which included two subsequent sessions 
during the summer, came amid increased tension caused by 
Iran's jailing of four individuals with joint Iranian and U.S. citi- 
zenship and a spate of accusations by U.S. diplomatic and mili- 



xlvi 



tary officials that Iran was supplying arms to Shia insurgents in 
Iraq. 

During 2006 and 2007, Iran's economy continued to grow at 
a moderate rate (a gross domestic product (GDP) increase of 
about 6 percent in 2006) as state policy continued to strive 
unsuccessfully for a diversity that would wean the economy 
from its excessive reliance on the petroleum industry. Because 
the labor force grew faster than the economy, the unemploy- 
ment rate increased from the 12 percent official figure for 
2006 to an unofficial rate of about 14 percent by mid-2007. The 
government also tried to limit the high consumer demand for 
gasoline during 2007. Up to 40 percent of domestic gas con- 
sumption had to be imported as a result of the inadequate 
capacity of the country's refineries. To reduce gasoline 
imports, gas rationing for cars went into effect at the beginning 
of the summer. This policy was greatly unpopular and 
prompted demonstrations and even riots in several cities, 
although the population seemed to have adjusted to the ration- 
ing by the end of the summer. In the fall of 2007, the govern- 
ment reduced gasoline subsidies in another effort to reduce 
demand. However, continuing shortages of consumer goods, 
related to Ahmadinejad's import and industrial policies, 
resulted in price rises. The official inflation rate rose to 19 per- 
cent at the end of 2007. The rising inflation was attributed, at 
least in part, to the UN-imposed economic sanctions, because, 
prodded by their governments, international banks based in 
European Union member countries began resticting or halting 
financial transactions with Iranian banks. Consequently, Ira- 
nian businesses, which for years had relied on low-interest, 
short-term credit from these banks to finance imports, were 
forced to turn to Asian banks, which charged significantly 
higher rates of interest. These credit costs were passed on to 
the consumer in the form of higher prices for all imported 
goods. 

Meanwhile, in July 2006, Khamenei declared a renewed cam- 
paign to privatize portions of Iran's economy, following several 
years in which official privatization goals were not met. Khame- 
nei's intent was to improve performance in many industries 
that had been rendered unproductive by high state subsidies 
and to prepare Iran for possible membership in the World 
Trade Organization. The privatization program for 2007 
included smaller banks, some electric power stations, some 
major mining and metallurgical companies, most airlines, and 



xlvii 



some telecommunications companies. In a step to improve the 
lot of Iran's poor, beginning in 2006 shares in many state com- 
panies were offered to people below the poverty line (a seg- 
ment of the population estimated at 12 million in 2007) and to 
rural residents. The privatization program also relied on sub- 
stantial purchases of shares by the Iranian expatriate commu- 
nity; access to shares by foreign firms was strictly limited, 
however. 

Despite increases in oil revenues estimated at 15 percent in 
2006, extensive government subsidy programs continued to 
cause shortfalls in the national budget. To help cover the defi- 
cit foreseen for fiscal year (see Glossary) 2007, the government 
removed US$12 billion from the Oil Stabilization Fund, which 
was set aside to minimize the effect of fluctuations in oil prices. 
In 2006 and 2007, Iran sought to expand economic relation- 
ships on several fronts. For example, it signed a new bilateral 
trade agreement with Persian Gulf neighbor Oman and sought 
major new investments in its petroleum industry from China 
and Japan, both of which have relied heavily on Iran for oil. 
Thus, in 2007 important aspects of both the domestic and 
international sectors of Iran's economy were in a state of uncer- 
tainty and transition. 

February 19, 2008 Eric Hooglund 



xlviii 



Chapter 1. Historical Setting 




Members of the Achaemenian royal bodyguard, from a bas-relief at Persepolis 



THE ISLAMIC REVOLUTION OF 1978-79 brought a sudden 
end to the rule of the Pahlavi dynasty, which for 50 years had 
been identified with the attempt to modernize and westernize 
Iran. The Revolution replaced the monarchy with an Islamic 
republic, vesting ultimate power in the hands of a clerical 
leader and the clerical class as a whole. It brought new elites to 
power, altered the pattern of Iran's foreign relations, and led to 
a substantial transfer of wealth from private ownership to state 
control. There were continuities across the watershed of the 
Revolution, however; bureaucratic structure and behavior, atti- 
tudes toward authority and individual rights, and the arbitrary 
use of power remained much the same. Nonetheless, com- 
bined with sweeping purges and executions, violent power 
struggles within the revolutionary coalition, and the Iran-Iraq 
War (1980-88), the Revolution amounted to a great upheaval 
in Iranian political and social life. The Revolution also was 
rooted in the idea of government based on the will of the peo- 
ple, and the reform movement ushered in by the election of 
Mohammad Khatami to the presidency in 1997 reflected the 
aspiration of many Iranians to greater freedom and the rule of 
law. But by 2000, the reform movement had suffered severe set- 
backs, and it was unclear whether the democratic or the auto- 
cratic legacy of the Islamic Revolution would prevail. 

The Revolution ended a pattern of monarchical rule that 
had been an almost uninterrupted feature of Iranian govern- 
ment for nearly 500 years. The tradition of monarchy itself was 
even older. In the sixth century B.C., Iran's first empire, the 
Achaemenian Empire, was already established. It had an abso- 
lute monarch, centralized rule, a highly developed system of 
administration, aspirations to world rule, and a culture that was 
uniquely Iranian even as it borrowed, absorbed, and trans- 
formed elements from other cultures and civilizations. 
Although Alexander the Great brought the Achaemenian 
Empire to an end in 330 B.C., under the Sassanian dynasty 
(A.D. 224-642) Iran once again became the center of an 
empire and a great civilization. 

The impact of the Islamic conquest in the seventh century 
was profound. It introduced a new religion and new social and 
legal systems. The Iranian heartland became part of a world 
empire whose center was not in Iran. Nevertheless, historians 



3 



Iran: A Country Study 



have found striking continuities in Iranian social structure, 
administration, and culture. Iranians contributed significantly 
to all aspects of Islamic civilization; in many ways, they helped 
shape the new order. By the ninth century, there was a revival 
of the Persian (Farsi) language and of a literature that was 
uniquely Iranian but also was enriched by Arabic and Islamic 
influences. 

The breakup of the Islamic empire led, in Iran as in other 
parts of the Islamic world, to the establishment of local dynas- 
ties. Iran, like the rest of the Middle East, was affected by the 
rise to power of the Seljuk Turks and then by the destruction 
wrought first by the Mongols and then by Timur, also called 
Tamerlane (Timur the Lame). 

With the rise of the Safavi dynasty (1501-1722), Iran was 
reconstituted as a territorial state within borders not very differ- 
ent from those prevailing today. Shia (see Glossary) Islam 
became the state religion, and monarchy once again the cen- 
tral institution. Persian became unquestionably the language of 
administration and high culture. Although historians no 
longer assert that under the Safavis Iran emerged as a nation- 
state in the modern sense of the term, nevertheless by the sev- 
enteenth century the sense of Iranian identity and of Iran as a 
state within roughly demarcated borders was more pro- 
nounced. 

The Qajar dynasty (1795-1925) attempted to revive the 
Safavi Empire, in many ways patterning their administration 
after that of the Safavis. But the Qajars lacked the claims to reli- 
gious legitimacy available to the Safavis. Also, they failed to 
establish strong central control and faced an external threat 
from technically, militarily, and economically superior Euro- 
pean powers, primarily Russia and Britain. Foreign interfer- 
ence in Iran, Qajar misrule, and new ideas on government in 
1905 led to protests and eventually to the Constitutional Revo- 
lution (1905-7), which, at least on paper, limited royal absolut- 
ism, created a constitutional monarchy, and recognized the 
people as a source of legitimacy. Various factors, however, 
resulted in the failure of the constitutional experiment: royalist 
counterrevolution, internal divisions, clerical opposition, the 
traditional attitudes of much of Iranian society, foreign inter- 
ference, and the fact that, despite popular enthusiasm, the 
meaning of constitutionalism was understood only by a small 
elite — and then only imperfectly. 



4 



Historical Setting 



The rise of Reza Shah Pahlavi, who as Reza Khan seized 
power in 1921 and established a new dynasty in 1925, reflected 
the failure of the constitutional experiment. His early actions 
also resulted from the aspirations of educated Iranians to cre- 
ate a state that was strong, centralized, free of foreign interfer- 
ence, economically developed, and possessed of those 
characteristics thought to distinguish the more advanced states 
of Europe from the countries of the East. 

Modernization continued under the second Pahlavi mon- 
arch, Mohammad Reza Shah Pahlavi. In the 1960s and 1970s, 
he further expanded industry, widened access to employment 
and other economic opportunities, increased the availability of 
education, built up the central government and the military, 
limited foreign influence, and gave Iran an influential role in 
regional affairs. 

However, major unresolved tensions were revealed in Ira- 
nian society by rioting during the 1951-53 oil nationalization 
crisis and in 1963 during the Muslim month of Moharram, in 
response to the announcement of certain government reforms. 
These responses stemmed from inequities in the distribution 
of wealth; the concentration of power in the hands of the 
crown and the bureaucratic, military, and entrepreneurial 
elites; demands for political participation by a growing middle 
class and members of upwardly mobile lower classes; a belief 
that Westernization posed a threat to Iran's national and 
Islamic identity; and a growing polarization between the reli- 
gious classes and the state. Although by the mid-1970s Iranians 
as a whole were enjoying considerably higher standards of liv- 
ing and greater employment and educational opportunities, 
these social tensions remained unresolved. They were exacer- 
bated by growing royal autocracy, economic dislocations 
caused by the huge infusion of new oil wealth, corruption, and 
a perception that the shah, in the rush to modernize, was heed- 
less of Iranian national and religious traditions. 

Discontent was expressed in public protests, then riots and 
demonstrations, which began in 1977 and spread rapidly in the 
following year. These upheavals, along with the emergence of a 
charismatic leader in the person of Ayatollah Sayyid Ruhollah 
Musavi Khomeini and the paralysis of the monarchy in 
response to the rising protest movement, cleared the way for 
the Islamic Revolution. During the decades that followed, that 
revolution fundamentally changed governance within Iran as 
well as Iran's relations with the rest of the world. 



Iran: A Country Study 



Ancient Iran 

Pre-Achaemenian Iran 

Iran's history as a nation of people speaking an Indo-Euro- 
pean language did not begin until the middle of the second 
millennium B.C. Before then, Iran was occupied by peoples 
with a variety of cultures. There are numerous artifacts attest- 
ing to settled agriculture, permanent sun-dried-brick dwellings, 
and pottery making as early as the sixth millennium B.C. The 
most advanced area technologically was Susiana (present-day 
Khuzestan Province; see fig. 1). By the fourth millennium B.C., 
the inhabitants of Susiana, the Elamites, were using semipicto- 
graphic writing, probably learned from the highly advanced 
civilization of Sumer in Mesopotamia (the ancient name for 
much of the area now known as Iraq) to the west. 

Sumerian influence in art, literature, and religion became 
particularly strong when the Elamite lands were occupied by, 
or at least came under the domination of, two Mesopotamian 
cultures, those of Akkad and Ur, during the middle of the third 
millennium. By 2000 B.C., the Elamites had become suffi- 
ciently unified to destroy the city of Ur. Elamite civilization 
developed rapidly from that point, and by the fourteenth cen- 
tury B.C. its art was at its most impressive. 

Immigration of the Medes and the Persians 

Small groups of nomadic, horse-riding peoples speaking 
Indo-European languages began moving into the Iranian cul- 
tural area from Central Asia near the end of the second millen- 
nium B.C. Population pressures, overgrazing in their home 
area, and hostile neighbors may have prompted these migra- 
tions. Some of the groups settled in eastern Iran, but others, 
those who were to leave significant historical records, pushed 
farther west toward the Zagros Mountains. 

Three major groups are identifiable — the Scythians, the 
Medes (the Amadai or Mada), and the Persians (also known as 
the Parsua or Parsa) . The Scythians established themselves in 
the northern Zagros Mountains and clung to a seminomadic 
existence in which raiding was the chief form of economic 
enterprise. The Medes settled over a huge area, reaching as far 
as modern Tabriz in the north and Esfahan in the south. They 
had their capital at Ecbatana (present-day Hamadan) and 
annually paid tribute to the Assyrians. The Persians were estab- 



6 



Historical Setting 



lished in three areas: to the south of Lake Urmia (called Lake 
Rezaiyeh under the Pahlavis), on the northern border of the 
kingdom of the Elamites; and in the environs of modern 
Shiraz, which would be their eventual settling place and to 
which they would give the name Parsa (roughly coterminous 
with present-day Fars Province). 

During the seventh century B.C., the Persians were led by 
Hakamanish (Achaemenes, in Greek), ancestor of the Achae- 
menian dynasty. A descendant, Cyrus II (also known as Cyrus 
the Great or Cyrus the Elder) , led the combined forces of the 
Medes and the Persians to establish the most extensive empire 
known in the ancient world. 

The Achaemenian Empire, 550-330 B.C. 

By 546 B.C., Cyrus had defeated Croesus, the Lydian king of 
fabled wealth, and had secured control of the Aegean coast of 
Asia Minor, Armenia, and the Greek colonies along the Levant 
(see fig. 2). Moving east, he took Parthia (land of the Arsacids, 
not to be confused with Parsa, which was to the southwest) , 
Chorasmia (Khwarezm) , and Bactria. He besieged and captured 
Babylon in 539 B.C. and released the Jews who had been held 
captive there, thus earning his immortalization in the Book of 
Isaiah. When Cyrus died in 529 B.C., his kingdom extended as 
far east as the Hindu Kush in present-day Afghanistan. 

Cyrus's successors were less successful. His unstable son, 
Cambyses II, conquered Egypt in 525 B.C. but later committed 
suicide during a revolt led by a priest, Gaumata, who held the 
throne until 522 B.C., when he was overthrown by a member of 
a lateral branch of the Achaemenian family, Darius I (also 
known as Darayarahush and Darius the Great) . Darius attacked 
the Greek mainland, which had supported rebellious Greek 
colonies under his aegis, but his defeat at the Battle of Mara- 
thon in 490 B.C. forced him to retract the limits of the empire 
to Asia Minor. 

The Achaemenians thereafter consolidated areas firmly 
under their control. It was Cyrus and Darius who, by sound and 
farsighted administrative planning, brilliant military maneuver- 
ing, and a humanistic worldview, established the greatness of 
the Achaemenians, raising them in less than 30 years from an 
obscure tribe to a world power. 

The quality of the Achaemenians as rulers began to disinte- 
grate, however, after the death of Darius in 486 B.C. His son 
and successor, Xerxes, chiefly occupied himself with suppress- 



7 



Iran: A Country Study 




Historical Setting 



ing revolts in Egypt and Babylonia. He also attempted to con- 
quer the Greek Peloponnesus, but, encouraged by a victory at 
Thermopylae, he overextended his forces and suffered over- 
whelming defeats at Salamis and Plataea. By the time his suc- 
cessor, Artaxerxes I, died in 424 B.C., the imperial court was 
beset by factionalism among the lateral family branches, a con- 
dition that persisted until the death in 330 B.C. of the last of 
the Achaemenians, Darius III, at the hands of his own subjects. 

The Achaemenians were enlightened despots who allowed a 
certain amount of regional autonomy in the form of the 
satrapy system. A satrapy was an administrative unit, usually 
organized on a geographical basis. A satrap (governor) admin- 
istered the region, a general supervised military recruitment 
and ensured order, and a state secretary kept official records. 
The general and the state secretary reported directly to the 
central government. The 20 satrapies were linked by a 2,500- 
kilometer highway, the most impressive stretch being the royal 
road from Susa to Sardis built by command of Darius I. Relays 
of mounted couriers could reach the most remote areas in 15 
days. As if to remind the satrapies of their limited indepen- 
dence, royal inspectors, the "eyes and ears of the king," would 
tour the empire and report on local conditions. Inclinations 
toward restiveness were further discouraged by the existence of 
the king's personal bodyguard of 10,000 men, called the 
Immortals. The most common language in the empire was Ara- 
maic. Old Persian was the "official language" but was used only 
for inscriptions and royal proclamations. 

Darius I revolutionized the economy by placing it on a sys- 
tem of silver and gold coinage. Trade was extensive, and under 
the Achaemenians an efficient infrastructure facilitated the 
exchange of commodities among the far reaches of the 
empire. As a result of this commercial activity, Persian words 
for typical items of trade became prevalent throughout the 
Middle East and eventually entered the English language; 
examples include asparagus, bazaar, lemon, melon, orange, peach, 
sash, shawl, spinach, tiara, and turquoise. Trade was one of the 
empire's main sources of revenue, along with agriculture and 
tribute. Other accomplishments of Darius's reign included 
codification of the data, a universal legal system upon which 
much of later Iranian law would be based, and construction of 
a new capital at Persepolis, where vassal states would offer 
their yearly tribute at the festival celebrating the spring equi- 
nox. In its art and architecture, Persepolis reflected Darius's 



9 



Iran: A Country Study 



perception of himself as the leader of conglomerates of peo- 
ple to whom he had given a new, single identity. The Achaeme- 
nian art and architecture found there is at once distinctive and 
highly eclectic. The Achaemenians took the art forms and the 
cultural and religious traditions of many of the ancient Middle 
Eastern peoples and combined them into a single form. This 
Achaemenian artistic style is evident in the iconography of 
Persepolis, which celebrates the king and the office of the 
monarch. 

Alexander the Great, the Seleucids, and the Parthians 

Envisioning a new world empire based on a fusion of Greek 
and Iranian culture and ideals, Alexander the Great of Mace- 
don accelerated the disintegration of the Achaemenian 
Empire. He was first accepted as leader by the fractious Greeks 
in 336 B.C., and by 334 B.C. had advanced to Asia Minor, an 
Iranian satrapy. In quick succession, he took Egypt, Babylonia, 
and then, over the course of two years, the heart of the Achae- 
menian Empire — Susa, Ecbatana, and Persepolis — the last of 
which he burned. Alexander married Roxana (Roshanak) , the 
daughter of the most powerful of the Bactrian chiefs, and in 
324 B.C. commanded his officers and 10,000 of his soldiers to 
marry Iranian women. The mass wedding, held at Susa, mani- 
fested Alexander's desire to consummate the union of the 
Greek and Iranian peoples. But this hope was dashed in 323 
B.C., when Alexander was stricken with fever and died in Baby- 
lon, leaving no heir. His empire was divided among four of his 
generals. One, Seleucus, who became ruler of Babylon in 312 
B.C., gradually reconquered most of Iran. The rulers 
descended from him are known as the Seleucids. Under Seleu- 
cus's son, Antiochus I, many Greeks entered Iran, and Hellenis- 
tic motifs in art, architecture, and urban planning became 
prevalent. 

Although the Seleucids faced challenges from the Ptolemaic 
kings of Egypt and from the growing power of Rome, the main 
threat came from the province of Fars. Arsaces (of the semino- 
madic Parni tribe), revolted against the Seleucid governor in 
247 B.C. and established a dynasty, the Arsacids, or Parthians, 
who would rule for nearly five centuries. During the second 
century, the Parthians were able to extend their rule to Bactria, 
Babylonia, Susiana, and Media, and, under Mithradates II 
(123-87 B.C.), Parthian conquests stretched from India to 
Armenia. After the victories of Mithradates II, the Parthians 



10 



Historical Setting 



began to claim descent from both the Greeks and the Achae- 
menians. They spoke a language similar to that of the Achae- 
menians, used the Middle Persian Pahlavi script that had 
developed from the Aramaic alphabet, and established an 
administrative system based on Achaemenian precedents. 

Early in the third century A.D., Ardeshir, son of the priest 
Papak, who claimed descent from a legendary hero Sasan, 
became the Parthian governor in the Achaemenian home 
province of Fars. In A.D. 224 he overthrew the last Parthian 
king and established the Sassanian dynasty, which was to last 
400 years. 

The Sassanians, A.D. 224-642 

The Sassanians established an empire roughly within the 
frontiers achieved by the Achaemenians, with its capital at Cte- 
siphon (see fig. 3). The Sassanians sought to resuscitate Iranian 
traditions and to obliterate Greek cultural influence. Their 
rule was characterized by centralization, ambitious urban plan- 
ning, agricultural development, and technological improve- 
ments. Sassanian rulers adopted the title shahanshah (king of 
kings), as sovereigns over numerous petty rulers, known as 
shahrdars. Historians believe that society was divided into four 
classes: priests, warriors, secretaries, and commoners. The royal 
princes, petty rulers, great landlords, and priests together con- 
stituted a privileged stratum, and the social system appears to 
have been fairly rigid. Sassanian rule and the system of social 
stratification were reinforced by Zoroastrianism, which had 
arisen in Persia between 1500 B.C. and 1000 B.C. and became 
the state religion under the Sassanians. The Zoroastrian priest- 
hood became immensely powerful. The head of the priestly 
class, the mobadan mobad, along with the military commander, 
the eran spahbod, and the head of the bureaucracy, were among 
the great men of the state. The Roman Empire had replaced 
Greece as Iran's principal western enemy, and hostilities 
between the two empires were frequent. Shahpur I (A.D. 241- 
72) , son and successor of Ardeshir, waged successful campaigns 
against the Romans and in A.D. 260 even took the emperor 
Valerian prisoner. 

Chosroes I (531-79), also known as Anushirvan the Just, is 
the most celebrated of the Sassanian rulers. He reformed the 
tax system and reorganized the army and the bureaucracy, 
tying the army more closely to the central government than to 
local lords. His reign witnessed the rise of the dihqans (literally, 



11 



Iran: A Country Study 




Historical Setting 



village lords), the petty landholding nobility who were the 
backbone of later Sassanian provincial administration and the 
tax collection system. Chosroes was a great builder, embellish- 
ing his capital, founding new towns, and constructing new 
buildings. Under his auspices, too, many books were brought 
from India and translated into Pahlavi. Some of these later 
found their way into the literature of the Islamic world. The 
reign of Chosroes II (591-628) was characterized by the waste- 
ful splendor and lavishness of the court. 

Toward the end of Chosroes II's reign, his power declined. 
In fighting with the Byzantine Empire (the successor to the 
eastern half of the Roman Empire), he enjoyed initial suc- 
cesses, captured Damascus, and seized the Holy Cross (upon 
which Christ presumably was crucified) in Jerusalem. But coun- 
terattacks by the Byzantine emperor Heraclius brought enemy 
forces deep into Sassanian territory. Years of warfare exhausted 
both the Byzantines and the Iranians. The later Sassanians 
were further weakened by economic decline, heavy taxation, 
religious unrest, rigid social stratification, the increasing power 
of the provincial landholders, and a rapid turnover of rulers. 
These factors would facilitate the Arab invasion in the seventh 
century. 

Islamic Conquest 

The bedouin Arabs who toppled the Sassanian Empire were 
propelled not only by a desire for conquest but also by a new 
religion, Islam. The Prophet Muhammad, a member of the 
Hashimite clan of the powerful tribe of Quraysh, proclaimed 
his prophetic mission in Arabia in 612 and eventually won over 
the city of his birth, Mecca, to the new faith. Within one year of 
Muhammad's death in 632, Arabia itself was secure enough to 
allow his secular successor, Abu Bakr, the first caliph, to begin a 
campaign against the Byzantine and Sassanian empires. 

Abu Bakr defeated the Byzantine army at Damascus in 635 
and then began his conquest of Iran. In 637 the Arab forces 
occupied the Sassanian capital of Ctesiphon (which they 
renamed Madain), and in 641-42 they defeated the Sassanian 
army at Nahavand. After that, Iran lay open to the invaders. 
The Islamic conquest was aided by the material and social 
bankruptcy of the Sassanians; the native populations had little 
to lose by cooperating with the conquering power. Moreover, 
the Muslims offered relative religious tolerance and fair treat- 
ment to populations that accepted Islamic rule without resis- 



13 



Iran: A Country Study 

tance. It was not until around 650, however, that resistance in 
Iran was quelled. Conversion to Islam, which offered certain 
advantages, was fairly rapid among the urban population but 
occurred more slowly among the peasantry and the dihqans. 
The majority of Iranians did not become Muslim until the 
ninth century. 

Although the conquerors, especially the Umayyads (the Mus- 
lim rulers whose dynasty succeeded Muhammad and ruled 
from 661 to 750), tended to stress the primacy of Arabs among 
Muslims, the Iranians were gradually integrated into the new 
community. The Muslim conquerors adopted the Sassanian 
coinage system and many Sassanian administrative practices, 
including the office of vizier, or minister, and the divan, a 
bureau or register for controlling state revenue and expendi- 
ture that became a characteristic of administration throughout 
Muslim lands. Later caliphs adopted Iranian court ceremonial 
practices and the trappings of Sassanian monarchy. Men of Ira- 
nian origin served as administrators after the conquest, and 
Iranians contributed significantly to all branches of Islamic 
learning, including philology, literature, history, geography, 
jurisprudence, philosophy, medicine, and the sciences. 

The Arabs were in control, however. As the new state reli- 
gion, Islam imposed its own system of beliefs, laws, and social 
mores. In regions that submitted peacefully to Muslim rule, 
landowners kept their land. But crown land, land abandoned 
by fleeing owners, and land taken by conquest passed into the 
hands of the new state. This included the rich lands of the 
Sawad, an alluvial plain in central and southern Iraq. Arabic 
became the official language of the court in 696, although Per- 
sian continued to be widely used as the spoken language. The 
shuubiyya literary controversy of the ninth through the elev- 
enth centuries, in which Arabs and Iranians each lauded their 
own and denigrated the other's cultural traits, suggests the sur- 
vival of a certain sense of distinct Iranian identity. In the ninth 
century, the emergence of more purely Iranian ruling dynas- 
ties witnessed the revival of the Persian language, enriched by 
Arabic loanwords and using the Arabic script, and of Persian 
literature. 

Another legacy of the Arab conquest was Shia Islam, which, 
although it has come to be identified closely with Iran, was not 
initially an Iranian religious movement. Rather, it originated 
with the Arab Muslims. In the great schism of Islam, one group 
among the community of believers maintained that leadership 



14 



Historical Setting 



of the community following the death of Muhammad rightfully 
belonged to his son-in-law, Ali, and to Ali's descendants. This 
group came to be known as the Shiat Ali, the partisans of Ali, 
or the Shias. Another group, supporters of Muawiya for the 
caliphate, challenged Ali's election to that position in 656. 
After Ali was assassinated while praying in a mosque at Kufa in 
661, Muawiya was declared caliph by the majority of the Islamic 
community. He became the first caliph of the Umayyad 
dynasty, which had its capital at Damascus. 

Ali's youngest son Hussein refused to pay the homage com- 
manded by Muawiya's son and successor Yazid I and fled to 
Mecca, where he was asked to lead the Shias in a revolt. At Kar- 
bala, now in Iraq, Hussein's band of 200 male and female fol- 
lowers, unwilling to surrender, were cut down by about 4,000 
Umayyad troops in 680. The Umayyad leader received Hus- 
sein's head, and the date of Hussein's death, on the tenth of 
Moharram, continues to be observed as a day of mourning by 
all Shias (see Shia Islam in Iran, ch. 2). 

The largest concentration of Shias in the first century of 
Islam was in southern Iraq. It was not until the sixteenth cen- 
tury, under the Safavis, that a majority of Iranians became 
Shias. Shia Islam became then, as it is now, the state religion. 

The Abbasids, who overthrew the Umayyads in 750, while 
sympathetic to the Iranian Shias, were clearly an Arab dynasty. 
They revolted in the name of descendants of Muhammad's 
uncle, Abbas, and the House of Hashim. Hashim was an ances- 
tor of both the Shia and the Abbas, or Sunni (see Glossary), 
lines, and the Abbasid movement enjoyed the support of both 
Sunni and Shia Muslims. The Abbasid army consisted primarily 
of people from Khorasan and was led by an Iranian general, 
Abu Muslim. It contained both Iranian and Arab elements, and 
the Abbasids enjoyed both Iranian and Arab support. 

The Abbasids, although interested in retaining Shia support, 
did not encourage the more extreme Shia aspirations. The 
Abbasids established their capital at Baghdad. Al Mamun, who 
seized power from his brother Amin and proclaimed himself 
caliph in 811, had an Iranian mother and thus a base of sup- 
port in Khorasan. The Abbasid dynasty continued the centraliz- 
ing policies of its predecessors. Under its rule, the Islamic 
world experienced a cultural efflorescence and the expansion 
of trade and economic prosperity. These were developments in 
which Iran shared. 



15 



Iran: A Country Study 



Subsequent ruling dynasties drew their rulers from the 
descendents of nomadic, Turkic-speaking warriors who had 
been moving out of Central Asia for more than a millennium. 
The Abbasid caliphs had begun using these people as slave war- 
riors as early as the ninth century. Shortly thereafter the real 
power of the Abbasid caliphs began to wane; eventually they 
became religious figureheads under the control of the erst- 
while slave warriors. As the power of the Abbasid caliphs dimin- 
ished, a series of independent and indigenous dynasties rose in 
various parts of Iran, some with considerable influence and 
power. Among the most important of these overlapping dynas- 
ties were the Tahirids in Khorasan (820-72), the Saffarids in 
Sistan (867-903), and the Samanids (875-1005), originally at 
Bukhoro, a city in what is now Uzbekistan. The Samanids even- 
tually ruled an area from central Iran to India. In 962 a Turkish 
slave governor of the Samanids, Alptigin, conquered Ghazna 
(in present-day Afghanistan) and established a dynasty, the 
Ghaznavids, that lasted to 1186. 

Several Samanid cities had been lost to another Turkish 
group, the Seljuks, a clan of the Oghuz (or Ghuzz) Turks, who 
lived north of the Oxus River (now called the Amu Darya). 
Their leader, Tughril Beg, turned his warriors against the 
Ghaznavids in Khorasan. He moved south and then west, con- 
quering but not wasting the cities in his path. In 1055 the 
caliph in Baghdad gave Tughril Beg robes, gifts, and the title 
"King of the East." Under Tughril Beg's successor, Malik Shah 
(1072-92), Iran enjoyed a cultural and scientific renaissance, 
largely attributed to his brilliant Iranian vizier, Nizam al Mulk. 
The Seljuks established the observatory where Umar (Omar) 
Khayyam did much of his research toward development of a 
new calendar, and they built religious schools in all the major 
towns. They brought Abu Hamid Ghazali, one of the greatest 
Islamic theologians, and other eminent scholars to the Seljuk 
capital at Baghdad and encouraged and supported their work. 

A serious internal threat to the Seljuks, however, came from 
the Ismailis, a secret sect with headquarters at Alumut, between 
Rasht and Tehran. They controlled the immediate area for 
more than 150 years and sporadically sent out adherents to 
strengthen their rule by murdering important officials. The 
word assassins, which was applied to these murderers, devel- 
oped from a European corruption of the name applied to 
them in Syria, hashishiyya, because folklore had it that they 
smoked hashish before their missions. 



16 



Historical Setting 



Invasions of the Mongols and Tamerlane 

After the death of Malik Shah in 1092, rule of Iran once 
again reverted to petty dynasties. During this time, Genghis 
(Chinggis) Khan brought together a number of Mongol tribes 
and led them on a devastating sweep through China. Then, in 
1219, he turned his 700,000 forces west and quickly devastated 
the cities of Bukhoro, Samarqand, Balkh, Merv, and Ney- 
shabur. Before his death in 1227, he had reached western 
Azarbaijan, pillaging and burning cities along the way. 

The Mongol invasion was disastrous to the Iranians. Destruc- 
tion of the qanat irrigation systems destroyed the pattern of rel- 
atively continuous settlement, producing numerous isolated 
oasis cities in a land where they had previously been rare. Many 
people, particularly males, were killed; between 1220 and 1258, 
the population of Iran dropped drastically. 

The Mongol rulers who followed Genghis Khan did little to 
improve Iran's situation. Genghis's grandson, Hulagu Khan, 
turned to foreign conquest, seizing Baghdad in 1258 and kill- 
ing the last Abbasid caliph. He was stopped at Ain Jalut in Pal- 
estine by the Mamluks, Egypt's ruling military caste. Afterward, 
Hulagu Khan returned to Iran and spent the rest of his life in 
Azarbaijan. A later Mongol ruler, Ghazan Khan (1295-1304), 
and his famous Iranian vizier, Rashid ad Din, brought Iran a 
brief, partial economic revival. The Mongols reduced taxes for 
artisans, encouraged agriculture, rebuilt and extended irriga- 
tion works, and improved the safety of the trade routes. As a 
result, commerce increased dramatically. Items from India, 
China, and Iran passed easily across the Asian steppes, and 
these contacts culturally enriched Iran. For example, Iranians 
developed a new style of painting based on a unique fusion of 
solid, two-dimensional Mesopotamian painting with the feath- 
ery brush strokes and other motifs characteristic of China. But 
after Ghazan's nephew Abu Said died in 1335, Iran again 
lapsed into petty dynasties — the Salghurid, Muzaffarid, Inju, 
and Jalayirid — under Mongol commanders, old Seljuk retain- 
ers, and regional chiefs. 

Tamerlane, variously described as of Mongol or Turkic ori- 
gin, was the next ruler to achieve emperor status. He con- 
quered Transoxiana proper and by 1381 established himself as 
sovereign. He did not have the huge forces of earlier Mongol 
leaders, so his conquests were slower and less savage than those 
of Genghis Khan or Hulagu Khan. Nevertheless, Shiraz and 
Esfahan were virtually leveled. Tamerlane's regime was charac- 



17 



Iran: A Country Study 

terized by its inclusion of Iranians in administrative roles and 
its promotion of architecture and poetry. His empire disinte- 
grated rapidly after his death in 1405, however, and Mongol 
tribes, Uzbeks, and Turkmens ruled an area roughly cotermi- 
nus with present-day Iran until the rise of the Safavi dynasty, 
the first native Iranian dynasty in almost 1,000 years. 

The Safavis, 1501-1722 

The Safavis, who came to power in 1501, were leaders of a 
militant Sufi order of Islamic mystics. The Safavis traced their 
ancestry to Sheikh Safi ad Din (died ca. 1334), the founder of 
the Sufis, who claimed descent from Shia Islam's Seventh 
Imam, Musa al Kazim. From their home base in Ardabil, the 
Safavis recruited followers among the Turkmen tribesmen of 
Anatolia and forged them into an effective fighting force and 
an instrument for territorial expansion. In the mid-fifteenth 
century, the Safavis adopted Shia Islam, and their movement 
became highly millenarian in character. In 1501, under their 
leader Ismail, the Safavis seized power in Tabriz, which became 
their capital. Ismail was proclaimed shah of Iran. The rise of 
the Safavis marks the reemergence in Iran of a powerful cen- 
tral authority within geographical boundaries attained by 
former Iranian empires. The Safavis declared Shia Islam the 
state religion and used proselytizing and force to convert the 
large majority of Muslims in Iran to the Shia sect. Under the 
early Safavis, Iran was a theocracy. Ismail's followers venerated 
him as the murshid-kamil, the perfect guide, who combined in 
his person both temporal and spiritual authority. In the new 
state, he was represented in both these functions by the vakil, 
an official who acted as a kind of alter ego. The sadr headed the 
powerful religious organization; the vizier, the bureaucracy; 
and the amir alumara, the fighting forces. These forces, the qiz- 
ilbash, came primarily from the seven Turkic-speaking tribes 
that had supported the Safavi bid for power. 

The Safavis faced the problem of integrating their Turkic- 
speaking followers with the native Iranians, their fighting tradi- 
tions with the Iranian bureaucracy, and their messianic ideol- 
ogy with the exigencies of administering a territorial state. The 
institutions of the early Safavi state and subsequent efforts at 
state reorganization reflect attempts, not always successful, to 
strike a balance among these various elements. The Safavis also 
faced external challenges from the Uzbeks to the northeast and 
the Ottoman Empire to the west. The Uzbeks were an unstable 



18 



Part of the Porch of Xerxes at Persepolis 
Courtesy LaVerle Berry 



19 



Iran: A Country Study 



element who raided into Khorasan, particularly when the cen- 
tral government was weak, and blocked the Safavi advance 
northward into Transoxiana. Based in present-day Turkey, the 
Ottomans, who were Sunnis, were rivals for the religious alle- 
giance of Muslims in eastern Anatolia and Iraq and pressed ter- 
ritorial claims in both these areas and in the Caucasus. 

The Safavi Empire received a blow that was to prove fatal in 
1524, when the Ottoman sultan Selim I defeated Safavi forces 
at Chaldiran and occupied the Safavi capital, Tabriz. Although 
he was forced to withdraw because of the harsh winter and the 
Safavis' scorched-earth policy, and although Safavi rulers con- 
tinued to assert claims to spiritual leadership, the defeat shat- 
tered belief in the shah as a semidivine figure and weakened 
his hold on the qizilbash chiefs. In 1533 the Ottoman sultan 
Suleyman occupied Baghdad and then extended Ottoman rule 
to southern Iraq. Except for a brief period (1624-38) when 
Safavi rule was restored, Iraq remained firmly in Ottoman 
hands. The Ottomans also continued to challenge the Safavis 
for control of Azarbaijan and the Caucasus until the Treaty of 
Qasr-e Shirin in 1639 established frontiers in both Iraq and in 
the Caucasus that remain virtually unchanged. 

The Safavi state reached its apogee during the reign of Shah 
Abbas (1587-1629). The shah gained breathing space to con- 
front and defeat the Uzbeks by signing a largely disadvanta- 
geous treaty with the Ottomans. He then fought successful 
campaigns against the Ottomans, reestablishing Iranian con- 
trol over Iraq, Georgia, and parts of the Caucasus. He counter- 
balanced the power of the qizilbash by creating a body of troops 
composed of Georgian and Armenian slaves who were loyal to 
the person of the shah. He extended state and crown lands and 
the provinces directly administered by the state, at the expense 
of the qizilbash chiefs. He relocated tribes to weaken their 
power, strengthened the bureaucracy, and further centralized 
the administration. 

Shah Abbas made a show of personal piety and supported 
religious institutions by building mosques and religious semi- 
naries and by making generous endowments for religious pur- 
poses. However, his reign witnessed the gradual separation of 
religious institutions from the state and an increasing move- 
ment toward a more independent religious hierarchy. 

In addition to reorganizing the Iranian polity supporting 
religious institutions, Shah Abbas promoted commerce and the 
arts. The Portuguese had previously occupied Bahrain and the 



20 



Historical Setting 



island of Hormoz off the Persian Gulf coast in their bid to dom- 
inate trade in the Indian Ocean and the Persian Gulf, but in 
1602 Shah Abbas expelled them from Bahrain, and in 1623 he 
enlisted the British (who sought a share of Iran's lucrative silk 
trade) to expel the Portuguese from Hormoz. He significantly 
enhanced government revenues by establishing a state monop- 
oly over the silk trade and encouraged internal and external 
trade by safeguarding the roads and welcoming British, Dutch, 
and other traders to Iran. With the encouragement of the 
shah, Iranian craftsmen excelled in producing fine silks, bro- 
cades, and other cloths, as well as carpets, porcelain, and metal- 
ware. When Shah Abbas built a new capital at Esfahan, he 
adorned it with fine mosques, palaces, schools, bridges, and a 
bazaar (see Glossary). He patronized the arts, and the calligra- 
phy, miniatures, painting, and architecture of his period are 
particularly noteworthy. 

The Safavi Empire declined after the death of Shah Abbas in 
1629 as a result of weak rulers, interference by the women of 
the harem in politics, the reemergence of qizilbash rivalries, 
maladministration of state lands, excessive taxation, reduced 
trade, and the weakening of Safavi military organization. (Both 
the qizilbash tribal military organization and the standing army 
composed of slave soldiers were deteriorating.) The last two 
Safavi rulers, Shah Sulayman (1669-94) and Shah Sultan Hus- 
sein (1694-1722), were voluptuaries. Once again the eastern 
frontiers began to be breached, and in 1722 a small body of 
Afghan tribesmen won a series of easy victories before entering 
and taking the capital itself, ending Safavi rule. 

Afghan supremacy was brief. Tahmasp Quli, a chief of the 
Afshar tribe, soon expelled the Afghans in the name of a surviv- 
ing member of the Safavi family. Then, in 1736, he assumed 
power in his own name as Nader Shah. He went on to drive the 
Ottomans from Georgia and Armenia and the Russians from 
the Iranian coast of the Caspian Sea and restored Iranian sover- 
eignty over Afghanistan. He also took his army on several cam- 
paigns into India, sacking Delhi in 1739 and bringing back 
fabulous treasures. Although Nader Shah achieved political 
unity, his military campaigns and extortionate taxation proved 
a terrible drain on a country already ravaged and depopulated 
by war and disorder, and in 1747 he was murdered by chiefs of 
his own Afshar tribe. 

A period of anarchy marked by a struggle for supremacy 
among Afshar, Qajar, Afghan, and Zand tribal chieftains fol- 



21 



Iran: A Country Study 

lowed Nader Shah's death. Finally, Karim Khan Zand (1750- 
79) was able to defeat his rivals and unify the country, except 
for Khorasan, under a loose form of central control. He 
refused to assume the title of shah, however, preferring to rule 
as vakil al ruaya, or deputy of the subjects. He is remembered 
for his mild and beneficent regime. 

The Qajars, 1795-1925 

At Karim Khan Zand's death, another struggle for power 
among the Zands, Qajars, and other tribal groups again dis- 
rupted economic life and plunged the country into disorder. 
This time Agha Mohammad Qajar defeated the last Zand ruler 
outside Kerman in 1794, thus beginning the Qajar dynasty, 
which would last until 1925. Under Fath Ali Shah (1797-1834), 
Mohammad Shah (1834-48), and Naser ad Din Shah (1848- 
96) , a degree of order, stability, and unity returned to the coun- 
try. The Qajars revived the concept of the shah as the shadow 
of God on earth and exercised absolute power over the ser- 
vants of the state. They appointed royal princes to provincial 
governorships and, in the course of the nineteenth century, 
increased their power in relation to that of the tribal chiefs, 
who provided contingents for the shah's army. Under the 
Qajars, the merchants and the ulama, or religious leaders, 
remained important members of the community. A large 
bureaucracy assisted the chief officers of the state, and, in the 
second half of the nineteenth century, new ministries and 
offices were created. The Qajars were unsuccessful, however, in 
their attempt to replace an Iranian military based on tribal lev- 
ies with a European-style standing army characterized by regu- 
lar training, organization, and uniforms. 

Early in the nineteenth century, the Qajars began to face 
pressure from two great world powers, Russia and Britain. Brit- 
ain's interest in Iran arose from the need to protect trade 
routes to India, while Russia's came from a desire to expand 
into Iranian territory from the north. In two disastrous wars 
with Russia, which ended with the Treaty of Gulistan (1812) 
and the Treaty of Turkmanchay (1828), Iran lost all its territo- 
ries in the Caucasus north of the Aras River. Then, in the sec- 
ond half of the century, Russia forced the Qajars to give up all 
claims to territories in Central Asia. Meanwhile, Britain twice 
landed troops in Iran to prevent the Qajars from reasserting a 
claim to the city of Herat, lost after the fall of the Safavis. 
Under the Treaty of Paris in 1857, Iran surrendered to Britain 



22 



The tomb, in Hamadan, of Ibn Sina (known as Avicenna to the West), 
a famous Persian mathematician who died in A.D. 1037 

Courtesy LaVerle Berry 

all claims to Herat and other territories in the present-day state 
of Afghanistan. 

Britain and Russia also came to dominate Iran's trade and 
interfered in Iran's internal affairs. The two great powers 
enjoyed overwhelming military and technological superiority 
and could take advantage of Iran's internal problems. Iranian 
central authority was weak; revenues were generally inadequate 
to maintain the court, bureaucracy, and army; the ruling class 
was divided and corrupt; and the people suffered exploitation 
by their rulers and governors. 

When Naser ad Din acceded to the throne in 1848, his prime 
minister, Mirza Taqi Khan Amir Kabir, attempted to strengthen 
the administration by reforming the tax system, asserting cen- 
tral control over the bureaucracy and the provincial governors, 
encouraging trade and industry, and reducing the influence of 
the Islamic clergy and foreign powers. He established a new 
school, the Dar ol Fonun, to educate members of the elite in 
the new sciences and in foreign languages. The power he con- 
centrated in his hands, however, aroused jealousy within the 
bureaucracy and fear in the king. In 1851 Kabir was dismissed 
and then executed, a fate shared by earlier powerful prime 
ministers. 



23 



Iran: A Country Study 

In 1858 officials such as Malkam Khan began to suggest in 
essays that the weakness of the government and its inability to 
prevent foreign interference lay in failure to learn the arts of 
government, industry, science, and administration from the 
advanced states of Europe. In 1871, with the encouragement of 
his new prime minister, Mirza Hosain Khan Moshir od Dowleh, 
the shah established a European-style cabinet with administra- 
tive responsibilities and a consultative council of senior princes 
and officials. In 1872 he granted a concession for railroad con- 
struction and other economic projects to a Briton, Baron Julius 
de Reuter, and visited Russia and Britain. Opposition from 
bureaucratic factions hostile to the prime minister and from 
clerical leaders who feared foreign influence, however, forced 
the shah to dismiss his prime minister and to cancel the conces- 
sion. Nevertheless, internal demand for reform was slowly 
growing. Moreover, Britain, to which the shah turned for pro- 
tection against Russian encroachment, continued to urge him 
to undertake reforms and open the country to foreign trade 
and enterprise as a means of strengthening the country. In 
1888, heeding this advice, the shah opened the Karun River in 
Khuzestan Province to foreign shipping and gave Reuter per- 
mission to open Iran's first bank, the Imperial Bank of Persia. 
In 1890 the shah gave another British company a monopoly 
over the country's tobacco trade. The tobacco concession was 
obtained through bribes to leading officials and aroused con- 
siderable opposition among the clerical classes, the merchants, 
and the people. When a leading cleric, Mirza Hasan Shirazi, 
issued a fatwa (religious ruling) forbidding the use of tobacco, 
the ban was universally observed, and the shah was once again 
forced to cancel the concession, at considerable cost to an 
already depleted treasury. 

The last years of Naser ad Din's reign as shah were character- 
ized by growing royal and bureaucratic corruption, oppression 
of the rural population, and indifference on the shah's part. 
The tax machinery broke down, and disorder became endemic 
in the provinces. New ideas and demands for reform were also 
becoming more widespread. In 1896, reputedly encouraged by 
Jamal ad Din al Afghani (called Asadabadi because he came 
from the town of Asadabad) , a well-known Islamic preacher 
and political activist, a young Iranian assassinated the shah. 



24 



Historical Setting 



The Constitutional Revolution 

Naser ad Din Shah's son and successor, Muzaffar ad Din 
Shah (1896-1907), was a weak ruler. Royal extravagance and 
the absence of revenues exacerbated financial problems. The 
shah quickly spent two large loans from Russia (1900 and 
1902), partly on trips to Europe. Public anger fed on the shah's 
propensity for granting concessions to Europeans in return for 
generous payments to him and his officials. People began to 
demand a curb on royal authority and the establishment of the 
rule of law as their concern over foreign, and especially Rus- 
sian, influence grew. 

The shah's failure to respond to protests by the religious 
establishment, the merchants, and other classes led the mer- 
chants and clerical leaders in January 1906 to take sanctuary 
from probable arrest in mosques in Tehran and outside the 
capital. When the shah reneged on a promise to permit the 
establishment of a "house of justice," or consultative assembly, 
10,000 people, led by the merchants, took sanctuary in June in 
the compound of the British legation in Tehran. In August the 
shah was forced to issue a decree promising a constitution. In 
October an elected assembly convened and drew up a constitu- 
tion that provided for strict limitations on royal power; an 
elected parliament, or Majlis (see Glossary), with wide powers 
to represent the people; and a government with a cabinet sub- 
ject to confirmation by the Majlis. The shah signed the consti- 
tution on December 30, 1906. He died five days later. The 
Supplementary Fundamental Laws approved in 1907 provided, 
within limits, for freedom of the press, speech, and association, 
and for security of life and property. According to scholar Ann 
K. S. Lambton, what became known as the Constitutional Revo- 
lution marked the end of the medieval period in Iran. The 
hopes for constitutional rule were not realized, however. 

Muzaffar ad Din's successor, Mohammad Ali Shah, was deter- 
mined to crush the constitution. After several disputes with the 
members of the Majlis, in June 1908 he used his Russian-offic- 
ered Persian Cossacks Brigade to bomb the Majlis building, 
arrest many of the deputies, and close down the assembly. 
Resistance to the shah, however, coalesced in Tabriz, Esfahan, 
Rasht, and elsewhere. In July 1909, constitutional forces 
marched from Rasht and Esfahan to Tehran, deposed the shah, 
and reestablished the constitution. The ex-shah went into exile 
in Russia. 



25 



Iran: A Country Study 

Although the constitutionalists had triumphed, they faced 
serious difficulties. The upheavals of the Constitutional Revolu- 
tion and civil war had undermined stability and trade. In addi- 
tion, the ex-shah, with Russian support, attempted to regain his 
throne, landing troops on the Caspian shore in July 1910. Most 
serious of all, the hope that the Constitutional Revolution 
would inaugurate a new era of independence from the great 
powers ended when, under the Anglo-Russian Agreement of 
1907, Britain and Russia agreed to divide Iran into spheres of 
influence. The Russians were to enjoy the exclusive right to 
pursue their interests in the northern sphere, the British in the 
south and east; both powers would be free to compete for eco- 
nomic and political advantage in a neutral sphere in the center. 
Matters came to a head when Morgan Shuster, an administra- 
tor from the United States hired as treasurer general by the Ira- 
nian government to reform its finances, sought to collect taxes 
from powerful officials who were Russian proteges and to send 
members of the treasury gendarmerie, a tax department police 
force, into the Russian zone. When in December 1911 the Maj- 
lis unanimously refused a Russian ultimatum demanding 
Shuster's dismissal, Russian troops, already in the country, 
moved to occupy the capital. To prevent this, on December 20 
chiefs of Bakhtiari tribes and their troops surrounded the Maj- 
lis building, forced acceptance of the Russian ultimatum, and 
shut down the assembly, once again suspending the constitu- 
tion. There followed a period of government by Bakhtiari 
chiefs and other powerful notables. 

World War I 

Iran hoped to avoid entanglement in World War I by declar- 
ing its neutrality but ended up as a battleground for Russian, 
Turkish, and British troops. When German agents tried to 
arouse the southern tribes against the British, Britain created 
an armed force, the South Persia Rifles, to protect its interests. 
Then a group of Iranian notables led by Nezam os Saltaneh 
Mafi, hoping to escape Anglo-Russian dominance and sympa- 
thetic to the German war effort, left Tehran, first for Qom and 
then for Kermanshah, where they established a provisional gov- 
ernment. The provisional government lasted for the duration 
of the war but failed to capture much support. 

At the end of the war, because of Russia's preoccupation with 
its own revolution, Britain was the dominant influence in 
Tehran. The foreign secretary, Lord Curzon, proposed an 



26 



Historical Setting 



agreement under which Britain would provide Iran with a loan 
and with advisers to the army and virtually every government 
department. The Iranian prime minister, Vosuq od Dowleh, 
and two members of his cabinet who had received a large 
financial inducement from the British, supported the agree- 
ment. The Anglo-Persian Agreement of 1919 was widely viewed 
as establishing a British protectorate over Iran. However, it 
aroused considerable opposition, and the Majlis refused to 
approve it. The agreement was already dead when, in February 
1921, Persian Cossacks Brigade officer Reza Khan, in collabora- 
tion with prominent journalist Sayyid Zia ad Din Tabatabai, 
marched into Tehran and seized power, inaugurating a new 
phase in Iran's modern history. 

The Era of Reza Shah, 1921-41 

Tabatabai became prime minister, and Reza Khan became 
commander of the armed forces in the new government. Reza 
Khan, however, quickly emerged as the dominant figure. 
Within three months, Tabatabai was forced out of the govern- 
ment and into exile. Reza Khan became minister of war. In 
1923 Ahmad Shah, who had succeeded his father as shah in 
1909, agreed to appoint Reza Khan prime minister and to leave 
for Europe. The shah was never to return. Reza Khan seriously 
considered establishing a republic, as his contemporary Kemal 
Ataturk had done in Turkey, but abandoned the idea in the 
face of clerical opposition. In October 1925, a Majlis domi- 
nated by Reza Khan's men deposed the Qajar dynasty; in 
December the Majlis conferred the crown on Reza Khan and 
his heirs. The military officer who had become master of Iran 
was crowned as Reza Shah Pahlavi in April 1926. 

Even before he became shah, Reza Khan had taken steps to 
create a strong central government and to extend government 
control over the country. Now, as Reza Shah, with the assistance 
of a group of army officers and younger bureaucrats, many 
trained in Europe, he launched a broad program of change 
designed to bring Iran into the modern world. To strengthen 
central authority, he built up Iran's heterogeneous military 
forces into a disciplined army of 40,000, and in 1926 he per- 
suaded the Majlis to approve universal military conscription. 
Reza Shah used the army not only to bolster his own power but 
also to pacify the country and to bring the tribes under control. 
In 1924 he broke the power of Sheikh Khazal, who was a British 



27 



Iran: A Country Study 

protege and practically autonomous in Khuzestan Province. In 
addition, Reza Shah forcibly settled many of the tribes. 

To extend government control and promote Westernization, 
the shah overhauled the administrative machinery and vastly 
expanded the bureaucracy. He created an extensive system of 
secular primary and secondary schools and, in 1935, estab- 
lished the country's first European-style university in Tehran. 
These schools and institutions of higher education became 
training grounds for the new bureaucracy and, along with eco- 
nomic expansion, helped create a new middle class. The shah 
also expanded the road network, successfully completed a 
trans-Iranian railroad, and established a string of state-owned 
factories to produce such basic consumer goods as textiles, 
matches, canned goods, sugar, and cigarettes. 

Many of the shah's measures were consciously designed to 
break the power of the religious hierarchy. His educational 
reforms ended the clerics' near-monopoly on education. To 
limit further the power of the clerics, he undertook a codifica- 
tion of the laws that created a body of secular law, applied and 
interpreted by a secular judiciary outside the control of the 
religious establishment. He excluded the clerics from judge- 
ships, created a system of secular courts, and transferred the 
important and lucrative task of notarizing documents from the 
clerics to state-licensed notaries. The state even encroached on 
the administration of vaqfs (religious endowments) and on the 
licensing of graduates of religious seminaries. 

Among other components, the new secular law included a 
civil code, the work of Justice Minister Ali Akbar Davar, enacted 
between 1927 and 1932; the General Accounting Act (1934- 
35), a milestone in financial administration; a new tax law; and 
a civil service code. 

Determined to unify what he saw as Iran's heterogeneous 
peoples, end foreign influence, and emancipate women, Reza 
Shah imposed European dress on the population. He opened 
the schools to women and brought them into the workforce. In 
1936 he forcibly abolished the wearing of the veil. 

Reza Shah initially enjoyed wide support for restoring order, 
unifying the country, and reinforcing national independence, 
and for his economic and educational reforms. In accomplish- 
ing all this, however, he took away effective power from the 
Majlis, muzzled the press, and arrested opponents of the gov- 
ernment. His police chiefs were notorious for their harshness. 
Several religious leaders were jailed or sent into exile. In 1936, 



28 



The tomb of Persian poet 
Umar ( Omar) Khayyam, 
1048-1131, Neyshabur 
Courtesy Nader Davoodi 




in one of the worst confrontations between the government 
and religious authorities, troops violated the sanctity of the 
shrine of Imam Reza in Mashhad, where worshipers had gath- 
ered to protest Reza Shah's reforms. Dozens of worshipers were 
killed and many injured. In addition, the shah arranged for 
powerful tribal chiefs to be put to death; bureaucrats who 
became too powerful suffered a similar fate. Reza Shah jailed 
and then quietly executed Abdul Hosain Teimurtash, his minis- 
ter of court and close confidant; Davar, the justice minister, 
committed suicide. 

As time went on, the shah grew increasingly avaricious and 
amassed great tracts of land. Moreover, his tax policies weighed 
heavily on the peasants and the lower classes. The great land- 
owners' control over land and the peasantry increased, and the 
condition of the peasants worsened during his reign. As a 
result, by the mid-1 930s there was considerable dissatisfaction 
in the country. 

Meanwhile, Reza Shah initiated changes in foreign affairs as 
well. In 1928 he abolished the capitulations under which Euro- 
peans in Iran had, since the nineteenth century, enjoyed the 
privilege of being subject to their own consular courts rather 
than to the Iranian judiciary. Suspicious of both Britain and 
the Soviet Union, the shah circumscribed contacts with foreign 



29 



Iran: A Country Study 

embassies. Relations with the Soviet Union had already deterio- 
rated because of that country's commercial policies, which in 
the 1920s and 1930s adversely affected Iran. In 1932 the shah 
offended Britain by canceling the agreement under which the 
Anglo-Persian Oil Company (formed in 1909) produced and 
exported Iran's oil. Although a new and improved agreement 
eventually was signed in 1933, it did not satisfy Iran's demands 
and left bad feeling on both sides. To counterbalance British 
and Soviet influence, Reza Shah encouraged German commer- 
cial enterprise in Iran. On the eve of World War II, Germany 
was Iran's largest trading partner. 

World War II and the Azarbaijan Crisis 

At the outbreak of World War II, Iran declared its neutrality, 
but the country was soon invaded by both Britain and the 
Soviet Union. Britain had been annoyed when Iran refused 
Allied demands that it expel all German nationals from the 
country. When German forces invaded the Soviet Union in 
1941, the Allies urgently needed to transport war materiel 
across Iran to the Soviet Union, an operation that would have 
violated Iranian neutrality. As a result, Britain and the Soviet 
Union simultaneously invaded Iran on August 26, 1941, the 
Soviets from the northwest and the British across the Iraqi fron- 
tier from the west and at the head of the Persian Gulf in the 
south. Resistance quickly collapsed. Reza Shah knew the Allies 
would not permit him to remain in power, so he abdicated on 
September 16 in favor of his son, who ascended the throne as 
Mohammad Reza Shah Pahlavi. Reza Shah and several mem- 
bers of his family were taken by the British first to Mauritius 
and then to Johannesburg, South Africa, where Reza Shah died 
in July 1944. 

The occupation of Iran proved of vital importance to the 
Allied cause and brought Iran closer to the Western powers. 
Britain, the Soviet Union, and the United States together man- 
aged to move more than 5 million tons of munitions and other 
war materiel across Iran to the Soviet Union. In addition, in 
January 1942 Iran signed a tripartite treaty of alliance with Brit- 
ain and the Soviet Union under which it agreed to extend non- 
military assistance to the war effort. The two Allied powers, in 
turn, agreed to respect Iran's independence and territorial 
integrity and to withdraw their troops from Iran within six 
months of the end of hostilities. In September 1943, Iran 
declared war on Germany, thus qualifying for membership in 



30 



Historical Setting 



the United Nations (UN). In November at the Tehran Confer- 
ence, President Franklin D. Roosevelt, Prime Minister Winston 
Churchill, and Prime Minister Josef Stalin reaffirmed a com- 
mitment to Iran's independence and territorial integrity and a 
willingness to extend economic assistance to Iran. 

The effects of the war were very disruptive for Iran, however. 
Food and other essential items were scarce. Severe inflation 
imposed great hardship on the lower and middle classes, while 
fortunes were made by individuals dealing in scarce items. The 
presence of foreign troops accelerated social change and also 
fed xenophobic and nationalist sentiments. An influx of rural 
migrants into the cities added to political unrest. The Majlis, 
dominated by the propertied interests, did little to ameliorate 
these conditions. With the political controls of the Reza Shah 
period removed, meanwhile, party and press activity revived. 
The communist Tudeh Party was especially active in organizing 
industrial workers. Like many other political parties of the left 
and center, it called for economic and social reform. 

Eventually, collusion between the Tudeh and the Soviet 
Union brought further disintegration to Iran. In September 
1944, while American companies were negotiating for oil con- 
cessions in Iran, the Soviets requested an oil concession in the 
five northern provinces. In December, however, the Majlis 
passed a law forbidding the government to discuss oil conces- 
sions before the end of the war. This led to fierce Soviet propa- 
ganda attacks on the government and agitation by the Tudeh 
in favor of a Soviet oil concession. In December 1945, the 
Azarbaijan Democratic Party, which had close links with the 
Tudeh and was led by Jafar Pishevari, announced the establish- 
ment of an autonomous republic. In a similar move, activists in 
neighboring Kurdistan established the Kurdish Republic of 
Mahabad. The Soviets supported the autonomy of both auton- 
omous republics, but Soviet troops remained in Khorasan, Gor- 
gan, Mazandaran, and Gilan. Other Soviet troops prevented 
government forces from entering Azarbaijan and Kurdistan. 
Soviet pressure on Iran continued as British and American 
troops evacuated in keeping with treaty commitments while 
Soviet troops remained in the country. Prime Minister Ahmad 
Qavam had to persuade Stalin to withdraw his forces by agree- 
ing to submit a Soviet oil concession to the Majlis and to nego- 
tiate a peaceful settlement to the Azarbaijan crisis with the 
Pishevari government. 



31 



Iran: A Country Study 

In April 1946, the government signed an oil agreement with 
the Soviet Union; in May, partly as a result of U.S., British, and 
UN pressure, Soviet troops withdrew from Iranian territory. 
Qavam took three Tudeh members into his cabinet. Qavam was 
able to reclaim his concessions to the Soviet Union, however, 
when an anticommunist tribal revolt in the south provided an 
opportunity to dismiss the Tudeh cabinet officers. In Decem- 
ber, ostensibly in preparation for new Majlis elections, Qavam 
sent the Iranian army into Azarbaijan. Without Soviet backing, 
the Pishevari government collapsed, and Pishevari himself fled 
to the Soviet Union. A similar fate befell the Kurdish Republic 
of Mahabad. In the new Majlis, a strong bloc of deputies, orga- 
nized as the National Front and led by Mohammad Mossadeq, 
helped defeat the Soviet oil concession agreement by 102 votes 
to two. The Majlis also passed a bill forbidding any further for- 
eign oil concessions and requiring the government to exploit 
oil resources directly. 

Soviet influence diminished further in 1947, when Iran and 
the United States signed an agreement providing for military 
aid and for a U.S. military advisory mission to help train the Ira- 
nian army. In February 1949, the Tudeh was blamed for an 
abortive attempt on the shah's life, and its leaders fled abroad 
or were arrested. The party was banned. 

Mossadeq and Oil Nationalization 

Beginning in 1948, sentiment for nationalization of Iran's oil 
industry grew. That year the Majlis approved the first economic 
development plan (1948-55; see Glossary), which called for 
comprehensive agricultural and industrial development. The 
Plan Organization was established to administer the program, 
which was to be financed in large part with oil revenues. Politi- 
cally conscious Iranians were aware, however, that the British 
government derived more revenue from taxing the concession- 
aire, the Anglo-Iranian Oil Company (AIOC — formerly the 
Anglo-Persian Oil Company), than the Iranian government 
derived from royalties. The oil issue figured prominently in 
elections for the Majlis in 1949, and nationalists in the new Maj- 
lis were determined to renegotiate the AIOC agreement. In 
November 1950, the Majlis committee concerned with oil mat- 
ters, headed by Mossadeq, rejected a draft agreement in which 
the AIOC had offered the government slightly improved terms. 
These terms did not include the 50-50 profit-sharing provision 
that was part of other new Persian Gulf oil concessions. 



32 



Historical Setting 



Subsequent negotiations with the AIOC were unsuccessful, 
partly because General Ali Razmara, who became prime minis- 
ter in June 1950, failed to convince the oil company of the 
strength of nationalist feeling in the country and in the Majlis. 
By the time the AIOC finally offered 50-50 profit sharing in 
February 1951, sentiment for nationalization of the oil industry 
had become widespread. Razmara advised against nationaliza- 
tion on technical grounds and was assassinated in March 1951 
by a member of the militant Islamic Warriors (Fedayan-e Is- 
lami). On March 15, the Majlis voted to nationalize the oil 
industry. In April the shah yielded to Majlis pressure and dem- 
onstrations in the streets by naming Mossadeq prime minister. 

Oil production came to a virtual standstill as British techni- 
cians left the country, and Britain imposed a worldwide 
embargo on the purchase of Iranian oil. In September 1951, 
Britain froze Iran's sterling assets and banned the export of 
goods to Iran. It also challenged the legality of the oil national- 
ization, taking its case against Iran to the International Court 
of Justice at The Hague. The court found in Iran's favor, but 
the dispute between Iran and the AIOC remained unsettled. 
Under U.S. pressure, the AIOC improved its offer to Iran. The 
excitement generated by the nationalization issue, anti-British 
feeling, agitation by radical elements, and the conviction 
among Mossadeq's advisers that Iran's maximum demands 
would, in the end, be met, however, led the government to 
reject all offers. The economy began to suffer from the loss of 
foreign exchange and oil revenues. 

Mossadeq's growing popularity and power led to political 
chaos and eventual U.S. intervention. Mossadeq had come to 
office on the strength of support from the National Front and 
other parties in the Majlis and as a result of his great popularity. 
His popular appeal, growing power, and intransigence on the oil 
issue were creating friction between the prime minister and the 
shah. In the summer of 1952, the shah refused the prime minis- 
ter's demand for the power to appoint the minister of war (and, 
by implication, to control the armed forces). Mossadeq 
resigned, three days of pro-Mossadeq rioting followed, and the 
shah was forced to reappoint Mossadeq to head the government. 

As domestic conditions deteriorated, Mossadeq's populist 
style grew more autocratic. In August 1952, the Majlis acceded 
to his demand for full powers in all affairs of government for a 
six-month period. These special powers subsequently were 
extended for a further six-month term. Mossadeq also obtained 



33 



Iran: A Country Study 



approval for a law to reduce, from six years to two, the term of 
the Senate (established in 1950 as the upper house of the Maj- 
lis), thus bringing about the dissolution of that body. Mos- 
sadeq's support in the lower house of the legislature was 
dwindling, however, so on August 3, 1953, he conducted a pleb- 
iscite for the dissolution of the Majlis, claimed a massive vote in 
favor of the proposal, and dissolved the legislative body. 

The administration of President Harry S. Truman initially 
had been sympathetic to Iran's nationalist aspirations. How- 
ever, in 1953, with the onset of the administration of President 
Dwight D. Eisenhower, the United States came to accept the 
view of the British government that no reasonable compromise 
with Mossadeq was possible and that, by working with the 
Tudeh, the Iranian prime minister was making probable a com- 
munist-inspired takeover. Mossadeq's intransigence and his 
inclination to accept Tudeh support, the Cold War atmo- 
sphere, and the fear of Soviet influence in Iran also shaped 
U.S. thinking. In June 1953, the Eisenhower administration 
approved a British proposal for a joint Anglo-American opera- 
tion, code-named Operation Ajax, to overthrow Mossadeq. Ker- 
mit Roosevelt of the U.S. Central Intelligence Agency (CIA) 
traveled secretly to Iran to coordinate plans with the shah and 
the Iranian military, which was led by General Fazlollah Zahedi. 

In accord with the plan, on August 13 the shah appointed 
Zahedi prime minister to replace Mossadeq. Mossadeq refused 
to step down and arrested the shah's emissary. This triggered 
the second stage of Operation Ajax, which called for a military 
coup. The plan initially seemed to fail, so the shah fled the 
country and Zahedi went into hiding. After four days of rioting, 
however, the tide turned. On August 19, pro-shah army units 
and street crowds defeated Mossadeq's forces. The shah 
returned to the country. Mossadeq was sentenced to three 
years' imprisonment for trying to overthrow the monarchy, but 
he was subsequently allowed to remain under house arrest in 
his village outside Tehran, where he died in 1967. His minister 
of foreign affairs, Hussein Fatemi, was executed. Hundreds of 
National Front leaders, Tudeh Party officers, and political activ- 
ists were arrested; several army officers who were Tudeh mem- 
bers also were sentenced to death. 



34 



Historical Setting 



The Post-Mossadeq Era and the Shah's White 
Revolution 

To help the Zahedi government through a difficult period, 
the United States arranged for US$45 million in immediate 
economic assistance. The Iranian government restored diplo- 
matic relations with Britain in December 1953, and a new oil 
agreement was concluded the following year. The shah, fearing 
both Soviet influence and internal opposition, sought to bol- 
ster his regime by edging closer to Britain and the United 
States. In October 1955, Iran joined the Baghdad Pact, which 
brought together the "northern tier" countries of Iraq, Turkey, 
and Pakistan in an alliance that included Britain, with the 
United States serving as a supporter but not a full member. 
(The pact was renamed the Central Treaty Organization — 
CENTO— after Iraq's withdrawal in 1958.) In March 1959, Iran 
signed a bilateral defense agreement with the United States. In 
the Cold War atmosphere, relations with the Soviet Union were 
correct but not cordial. The shah visited the Soviet Union in 
1956, but Soviet propaganda attacks and Iran's alliance with 
the West continued. Internally, a period of political repression 
followed the overthrow of Mossadeq, as the shah concentrated 
power in his own hands. He banned or suppressed the Tudeh, 
the National Front, and other parties; muzzled the press; and 
strengthened the secret police agency, SAVAK (Sazman-e Ette- 
laat va Amniyat-e Keshvar) . Elections to the restored Majlis in 
1954 and 1956 were closely controlled. The shah appointed 
Hussein Ala to replace Zahedi as prime minister in April 1955 
and thereafter named a succession of prime ministers who 
were willing to do his bidding. 

Attempts at economic development and political reform 
were inadequate. Rising oil revenues allowed the government 
to launch the second economic development plan (1955-62) 
in 1956. Several large-scale industrial and agricultural projects 
were initiated, but economic recovery from the disruptions of 
the oil nationalization period was slow. The infusion of oil 
money led to rapid inflation and spreading discontent, but 
strict controls provided no outlets for political unrest. When 
martial law, which had been instituted in August 1953 after the 
coup, ended in 1957, the shah ordered two of his senior offi- 
cials to form a majority party and a loyal opposition as the basis 
for a two-party system. These became known as the Melliyun 
and the Mardom parties. These officially sanctioned parties did 



35 



Iran: A Country Study 

not satisfy demands for wider political representation, however. 
During Majlis elections in 1960, charges of widespread fraud 
could not be suppressed, and the shah was forced to cancel bal- 
loting. Jafar Sharif Emami, a staunch loyalist, became prime 
minister. After renewed and more strictly controlled elections, 
the Majlis convened in February 1961. But with economic con- 
ditions and political unrest both worsening, the Sharif Emami 
government fell in May 1961. 

Yielding both to domestic demands for change and to pres- 
sure for reform from U.S. President John F. Kennedy's adminis- 
tration, the shah named Ali Amini, a wealthy landlord and 
senior civil servant, as prime minister. Amini received a man- 
date from the shah to dissolve parliament and rule for six 
months by cabinet decree. Known as an advocate of reform, 
Amini loosened controls on the press, permitted the National 
Front and other political parties to resume activity, and 
ordered the arrest of a number of former senior officials on 
charges of corruption. Under Amini, the cabinet approved the 
third economic development plan (1962-68) and undertook a 
program to reorganize the civil service. In January 1962, in the 
single most important measure of the 14-month Amini govern- 
ment, the cabinet approved a law on land distribution. 

The Amini government, however, was beset by numerous 
problems. Belt-tightening measures ordered by the prime min- 
ister were necessary, but in the short term they intensified 
recession and unemployment. This recession caused discon- 
tent in the bazaar and business communities. In addition, the 
prime minister acted in an independent manner, and the shah 
and senior military and civilian officials close to the court 
resented this challenge to royal authority. Moreover, although 
they were enjoying limited freedom of activity for the first time 
in many years, the National Front and other opposition groups 
pressed the prime minister for elections and withheld coopera- 
tion. When Amini was unable to close a large budget deficit, 
the shah refused to cut the military budget, and the United 
States, which had previously supported the prime minister, 
refused further aid. As a result, Amini resigned in July 1962. 

Amini was replaced by Asadollah Alam, a confidant of 
Mohammad Reza Shah. Building on the credit earned in the 
countryside and in urban areas by the land distribution pro- 
gram, the shah submitted six measures to a national referen- 
dum in January 1963. In addition to land reform, these 
measures included profit sharing for industrial workers in pri- 



36 



Historical Setting 



vate-sector enterprises, nationalization of forests and pasture- 
land, the sale of government factories to finance land reform, 
amendment of the electoral law to give more representation on 
supervisory councils to workers and farmers, and establishment 
of the Literacy Corps, an institution that would enable young 
men to satisfy their military obligation by working as village 
reading teachers. The shah described the package as his White 
Revolution (see Glossary), and when the referendum votes 
were counted, the government announced a 99 percent major- 
ity in favor of the program. In addition to these other reforms, 
the shah announced in February that he was extending the 
right to vote to women. 

The reforms earned the government considerable support 
among certain sectors of the population, but they did not deal 
immediately with sources of unrest. Economic conditions were 
still difficult for the poorer classes. Many clerical leaders 
opposed land reform and the extension of suffrage to women. 
These leaders were also concerned about the extension of gov- 
ernment and royal authority that the reforms implied. In June 
1963, Ayatollah Sayyid Ruhollah Musavi Khomeini, a religious 
leader in Qom, was arrested after a fiery speech in which he 
directly attacked the shah. The arrest sparked three days of the 
most violent unrest the country had witnessed since the over- 
throw of Mossadeq a decade earlier. The shah severely sup- 
pressed the riots, and, for the moment, the government 
appeared to have triumphed over its opponents. 

State and Society, 1964-74 

Elections to the twenty-first Majlis in September 1963 led to 
the formation of a new political party, Iran Novin (New Iran), 
committed to a program of economic and administrative 
reform and renewal. The Alam government had opened talks 
with National Front leaders earlier in the year, but no accom- 
modation had been reached, and the talks had broken down 
over such issues as freedom of activity for the front. As a result, 
the front was not represented in the elections, which were lim- 
ited to the officially sanctioned parties, and the only candidates 
on the slate were those presented by the Union of National 
Forces, an organization of senior civil servants and officials and 
workers' and farmers' representatives put together with gov- 
ernment support. After the elections, the largest bloc in the 
new Majlis, with 40 seats, was a group called the Progressive 
Center. An exclusive club of senior civil servants, the center 



37 



Iran: A Country Study 

had been established by Hasan Ali Mansur in 1961 to study and 
make policy recommendations on major economic and social 
issues. In June 1963, the shah had designated the center as his 
personal research bureau. When the new Majlis convened in 
October, 100 more deputies joined the center, giving Mansur a 
majority. In December Mansur converted the Progressive Cen- 
ter into a political party, Iran Novin. In March 1964, Alam 
resigned, and the shah appointed Mansur prime minister at 
the head of a government led by Iran Novin. 

The events leading to the establishment of Iran Novin and 
the appointment of Mansur as prime minister represented a 
renewed attempt by the shah and his advisers to create a politi- 
cal organization that would be loyal to the crown, attract the 
support of the educated classes and the technocratic elite, and 
strengthen the administration and the economy. Iran Novin 
drew its membership almost exclusively from a younger genera- 
tion of senior civil servants, Western-educated technocrats, and 
business leaders. Initially, membership was limited to 500 hand- 
picked persons and was allowed to grow very slowly. In time it 
came to include leading members of the provincial elite and its 
bureaucratic, professional, and business classes. Even in the 
late 1960s and early 1970s, when trade unions and professional 
organizations affiliated themselves with the party, full member- 
ship was reserved for a limited group. 

In carrying out economic and administrative reforms, Man- 
sur created four new ministries and transferred the authority 
for drawing up the budget from the Ministry of Finance to the 
newly created Budget Bureau. The bureau was attached to the 
Plan Organization and was responsible directly to the prime 
minister. In subsequent years, it introduced greater rationality 
in planning and budgeting. Mansur appointed younger tech- 
nocrats to senior civil service posts, a policy continued by his 
successor. He also created the Health Corps, modeled after the 
Literacy Corps, to provide primary health care to rural areas. 

In the Majlis, the government enjoyed a comfortable major- 
ity, and the nominal opposition, the Mardom Party, generally 
voted with the government party. An exception, however, was 
the general response to a bill establishing a status of forces 
agreement to grant diplomatic immunity to U.S. military per- 
sonnel serving in Iran and to their staffs and families. In effect, 
the agreement would allow these Americans to be tried by U.S. 
rather than Iranian courts for crimes committed on Iranian 
soil. For Iranians this provision recalled the humiliating capitu- 



38 



Historical Setting 



latory concessions extracted from Iran by the imperial powers 
in the nineteenth century. Feeling against the bill was suffi- 
ciently strong that 65 deputies absented themselves from the 
legislature, and 61 opposed the bill when it was put to a vote in 
October 1964. 

The status of forces legislation also aroused strong feeling 
outside the Majlis. Khomeini, who had been released from 
house arrest in April 1964, denounced the measure in a public 
sermon before a huge congregation in Qom. Tapes of the ser- 
mon and a leaflet based on it were circulated widely and 
attracted considerable attention. Khomeini was arrested again 
in November within days of the sermon and sent into exile in 
Turkey. In October 1965, he was permitted to take up resi- 
dence in the city of An Najaf, Iraq — the site of numerous Shia 
shrines — where he was to remain for the next 13 years. 

Although economic conditions were soon to improve dra- 
matically, the country had not yet fully recovered from the 
recession of 1959-63, which had been particularly hard on the 
poorer classes. Mansur attempted to close a budget deficit of 
an estimated US$300 million (at then-prevalent rates of 
exchange) by imposing heavy new taxes on gasoline and kero- 
sene and on exit permits for Iranians leaving the country. 
Because kerosene was the primary heating fuel for the working 
classes, the new taxes proved highly unpopular. Taxicab drivers 
in Tehran went on strike, and Mansur was forced to rescind the 
fuel taxes in January 1965, six weeks after they had been 
imposed. An infusion of US$200 million in new revenues 
(US$185 million from a cash bonus for five offshore oil conces- 
sions granted to U.S. and West European firms and US$15 mil- 
lion from a supplementary oil agreement concluded with the 
Consortium, a group of foreign oil companies) helped the gov- 
ernment through its immediate financial difficulties. 

With this assistance, Mohammad Reza Shah Pahlavi was able 
to maintain political stability despite the assassination of his 
prime minister and an attempt on his own life. On January 21, 
1965, Mansur was murdered by members of a radical Islamic 
group. Evidence made available after the Islamic Revolution 
revealed that the group had affiliations with clerics close to 
Khomeini. A military tribunal issued death sentences to six of 
those charged and sentenced the others to long prison terms. 
In April there was also an attempt on the shah's life, organized 
by a group of Iranian graduates of British universities. To 
replace Mansur as prime minister, the shah appointed Amir 



39 



Iran: A Country Study 



Abbas Hoveyda, a former diplomat and an executive of the 
National Iranian Oil Company (NIOC). Hoveyda had helped 
Mansur found the Progressive Center and Iran Novin and had 
served as his minister of finance. 

Hoveyda's appointment marked the beginning of nearly a 
decade of impressive economic growth and relative political 
stability. During this period, the shah also used Iran's enhanced 
economic and military strength to secure a more influential 
role for the country in the Persian Gulf region, and he 
improved relations with Iran's immediate neighbors and the 
Soviet Union and its allies. Hoveyda remained in office for the 
next 12 years, the longest term of any of Iran's modern prime 
ministers. During this period, Iran Novin dominated the gov- 
ernment and the Majlis. It won large majorities in the 1967 and 
1971 elections, both of which were carefully controlled by the 
authorities. Only the Mardom Party and, later, the Pan-Iranist 
Party, an extreme nationalist group, were allowed to compete 
with Iran Novin. Neither opposition party was able to secure 
more than a handful of Majlis seats, and neither engaged in 
serious criticism of government programs. 

In 1969 and again in 1972, the shah appeared ready to per- 
mit the Mardom Party, under new leadership, to function as a 
genuine opposition, that is, to criticize the government openly 
and to contest elections more energetically, but these develop- 
ments did not occur. Iran Novin 's domination of the adminis- 
trative machinery was made further evident during municipal 
council elections held in 136 towns throughout the country in 
1968. Iran Novin won control of a large majority of the councils 
and of every seat in 115 of them. Only 10 percent of eligible 
voters cast ballots in Tehran, however, a demonstration of pub- 
lic indifference that was not confined to the capital. 

Under Hoveyda the government improved its administrative 
machinery and launched what was dubbed "the education rev- 
olution." It adopted a new civil service code and a new tax law 
and appointed better-qualified personnel to key posts. Hoveyda 
also created several additional ministries in 1967, including the 
Ministry of Science and Higher Education, which was intended 
to help meet the need for an expanded and more specialized 
workforce. In mid-1968, the government began a program that, 
although it did not resolve problems of overcrowding and 
uneven quality, substantially increased the number of institu- 
tions of higher education, brought students from provincial 
and lower middle-class backgrounds into the new community 



40 



Historical Setting 



colleges, and created a number of institutions of high aca- 
demic standing, such as Tehran's Arya Mehr Technical Univer- 
sity (see Education, ch. 2). 

In 1960 the queen, Farah Diba Pahlavi, had given birth to a 
male heir, Reza. In 1967, because the crown prince was still very 
young, steps were taken to regularize the procedure for the 
succession. Under the constitution, if the shah were to die 
before the crown prince came of age, the Majlis would meet to 
appoint a regent. There might be a delay in the appointment 
of a regent, especially if the Majlis was not in session. A constit- 
uent assembly, convened in September 1967, amended the 
constitution, providing for the queen to become regent auto- 
matically unless the shah in his lifetime designated another 
individual. 

In October 1967, believing his achievements finally justified 
such a step, the shah celebrated his long-postponed corona- 
tion. Like his father, he placed the crown on his own head. To 
mark the occasion, the Majlis conferred on the shah the title of 
Arya Mehr, or "Light of the Aryans." This glorification of the 
monarchy and the monarch, however, was not universally pop- 
ular with Iranians. In 1971 celebrations were held to mark what 
was presented as 2,500 years of uninterrupted monarchy (there 
were actually gaps in the chronological record) and the twenty- 
fifth centennial of the founding of the Iranian empire by Cyrus 
the Great. The ceremonies were designed primarily to cele- 
brate the institution of the monarchy and to affirm the position 
of the shah as the country's absolute and unchallenged ruler. 
The lavish ceremonies (which many compared to a Hollywood- 
style extravaganza) , the virtual exclusion of Iranians from the 
celebrations at which the honored guests were foreign heads of 
state, and the excessive adulation of the person of the shah in 
official propaganda generated much adverse domestic com- 
ment. A declaration by Khomeini condemning the celebrations 
and the regime received wide circulation. In 1975, when the 
Majlis, at government instigation, voted to alter the Iranian cal- 
endar so that year one of the calendar coincided with the first 
year of the reign of Cyrus rather than with the beginning of the 
Islamic era, many Iranians viewed the move as a gratuitous 
insult to religious sensibilities. 

Iran, meantime, experienced a period of unprecedented 
and sustained economic growth. It also was a period of rela- 
tively little serious political unrest, attributable in large part to 
the land distribution program launched in 1962, along with 



41 



Iran: A Country Study 



steadily expanding job opportunities, improved living stan- 
dards, and moderate inflation between 1964 and 1973. 

In foreign policy, the shah used the relaxation in East-West 
tensions to improve relations with the Soviet Union. In an 
exchange of notes in 1962, he gave Moscow assurances he 
would not allow Iran to become a base for aggression against 
the Soviet Union or permit foreign missile bases to be estab- 
lished on Iranian soil. In 1965 Iran and the Soviet Union 
signed a series of agreements under which the Soviets provided 
credits and technical assistance to build Iran's first steel mill in 
exchange for shipments of Iranian natural gas. This led to con- 
struction of an almost 2,000-kilometer trans-Iranian pipeline 
from the southern natural gas fields to the Iranian-Soviet fron- 
tier. The shah also bought small quantities of arms from the 
Soviet Union and expanded trade with East European states. 
Although Soviet officials did not welcome the increasingly 
close military and security cooperation between Iran and the 
United States, especially after 1971, Moscow did not allow this 
to disrupt its own rapprochement with Tehran. 

In 1964 the shah joined the heads of state of Turkey and 
Pakistan to create an organization, Regional Cooperation for 
Development (RCD), for economic, social, and cultural coop- 
eration among the three countries "outside the framework of 
the Central Treaty Organization." The establishment of the 
RCD was seen as a sign of the diminishing importance of 
CENTO and, like the rapprochement with the Soviet Union, of 
the shah's increasing independence in foreign policy. The 
three RCD member states undertook. a number of joint eco- 
nomic and cultural projects, though none on a large scale. 

The shah also began to play a larger role in Persian Gulf 
affairs. He supported the royalists in the Yemen Civil War 
(1962-70) and, beginning in 1971, assisted the sultan of Oman 
in putting down a rebellion in Dhofar. He also reached an 
understanding with Britain on the fate of Bahrain and three 
smaller islands in the Persian Gulf that Britain had controlled 
since the nineteenth century but that Iran continued to claim. 
Britain's decision to withdraw from the Gulf by 1971 and to 
help organize the Trucial States into a federation of indepen- 
dent states (eventually known as the United Arab Emirates — 
UAE) necessitated resolution of that situation. In 1970 the 
shah agreed to give up Iran's long-standing claim to Bahrain 
and to abide by the desire of the majority of its inhabitants that 
it become an independent state. The shah, however, continued 



42 



The shah and his family, with eldest son, Reza Cyrus Pahlavi, 
standing in rear (Photo taken in the mid-1970s) 



43 



Iran: A Country Study 



to press his claim to three islands, Abu Musa (controlled by the 
sheikh of Sharjah) and the Greater and Lesser Tunbs (con- 
trolled by the sheikh of Ras al Khaymah). He secured control 
of Abu Musa by agreeing to pay the sheikh of Sharjah an 
annual subsidy, and he seized the two Tunbs by military force, 
immediately following Britain's withdrawal. 

This incident offended Iraq, however, which broke diplo- 
matic relations with Iran as a result. Relations with Iraq 
remained strained until 1975, when Iran and Iraq signed the 
Algiers Agreement, under which Iraq acceded to Iran's long- 
standing demand for equal navigation rights in the Shatt al 
Arab (see Glossary), and the shah agreed to end support for 
the Kurdish rebellion in northern Iraq. 

Tehran maintained generally good relations with the other 
Persian Gulf states. Iran signed agreements with Saudi Arabia 
and other Gulf states delimiting frontiers along the continental 
shelf in the Gulf, began cooperation and information sharing 
on security matters with Saudi Arabia, and encouraged closer 
cooperation among the newly independent Gulf sheikhdoms 
through the Gulf Cooperation Council. 

To enhance Iran's role in the Persian Gulf, the shah 
expanded and provided additional equipment for the Iranian 
army, air force, and navy, using oil revenues to pay for the 
upgrades. His desire that Iran play the primary role in guaran- 
teeing Gulf security in the aftermath of the British withdrawal 
coincided with President Richard M. Nixon's hopes for the 
region. In the Nixon Doctrine, enunciated in 1969, the U.S. 
president had expressed his preference that U.S. allies shoul- 
der greater responsibility for regional security. During his 1972 
visit to Iran, Nixon took the unprecedented step of allowing 
the shah to purchase any conventional weapon in the U.S. arse- 
nal in quantities the shah believed necessary for Iran's defense. 
U.S. -Iranian military cooperation deepened when the shah 
allowed the United States to establish two listening posts in 
Iran to monitor Soviet ballistic missile launches and other mili- 
tary activity. 

Renewed Opposition 

In the years that followed the riots of June 1963, there was lit- 
tle overt political opposition. The political parties that had 
been prominent from 1950 to 1963 were weakened by arrests, 
exile, and internal splits. Political repression continued, and it 
proved more difficult to articulate a coherent policy of opposi- 



44 



Historical Setting 



tion in a period of economic prosperity, foreign policy suc- 
cesses, and such reform measures as land distribution. 
Nonetheless, opposition parties were gradually reorganized, 
new groups committed to more violent forms of struggle were 
formed, and more radical Islamic ideologies were developed to 
revive and fuel the opposition movements. Both the Tudeh and 
the National Front underwent numerous splits and reorganiza- 
tions. The Tudeh leadership remained abroad, and the party 
did not play a prominent role in Iran until after the Islamic 
Revolution. Of the National Front parties that managed to sur- 
vive the post-1963 clampdown, the most prominent was the 
Nehzat-e Azadi-ye Iran, or the Iran Freedom Movement (IFM), 
led by Mehdi Bazargan. Bazargan worked to establish links 
between his movement and the moderate clerical opposition. 
Like others who looked to Islam as a vehicle for political mobi- 
lization, Bazargan was active in preaching the political perti- 
nence of Islam to a younger generation of Iranians. Among the 
best-known thinkers associated with the IFM was Ali Shariati, 
who argued for an Islam committed to political struggle, social 
justice, and the cause of the deprived classes. 

Khomeini, in exile in Iraq, continued to issue antigovern- 
ment statements, to attack the shah personally, and to organize 
supporters. In a series of lectures delivered to his students in 
An Najaf in 1969 and 1970 and later published in book form 
under the title of Velayat-e Faqih (Rule of the Islamic Jurist), he 
argued that monarchy was a form of government abhorrent to 
Islam, that true Muslims must strive for the establishment of an 
Islamic state, and that the leadership of the state belonged by 
right to the faqih (see Glossary), or Islamic jurist. A network of 
clerics worked for Khomeini in Iran, having returned from 
periods of imprisonment and exile to continue their activities. 
Increasing internal difficulties in the early 1970s gradually won 
Khomeini a growing number of followers. 

In the meantime, some younger Iranians, disillusioned with 
what they perceived to be the ineffectiveness of legal opposi- 
tion to the regime and attracted by the example of guerrilla 
movements in Cuba, Vietnam, and China, formed a number of 
underground groups committed to armed struggle against the 
regime. Most of these groups were uncovered and broken up 
by the security authorities, but two survived: the Fedayan 
(Fedayan-e Khalq, or People's Warriors) and the Mojahedin 
(Mojahedin-e Khalq, or People's Fighters). The Fedayan were 
Marxist in orientation, whereas the Mojahedin sought to find 



45 



Iran: A Country Study 

in Islam the inspiration for an ideology of political struggle and 
economic radicalism. Nevertheless, both movements used simi- 
lar tactics in attempting to overthrow the regime: attacks on 
police stations; bombing of U.S., British, and Israeli commer- 
cial or diplomatic offices; and assassination of Iranian security 
officers and U.S. military personnel stationed in Iran. In Febru- 
ary 1971, the Fedayan launched the first major guerrilla action 
against the state: an armed attack on a post of the Imperial Ira- 
nian Gendarmerie (the internal security and border guard) at 
Siahkal in the Caspian forests of northern Iran. Several similar 
actions followed. A total of 341 members of these guerrilla 
movements died between 1971 and 1979 in armed confronta- 
tions with security forces, by execution or suicide, or while in 
the hands of their jailers. Many more served long terms in 
prison. 

The Coming of the Revolution 

By late 1976, it was evident that the Iranian economy was in 
trouble. The shah's attempt to use Iran's vastly expanded oil 
revenues after 1973 for an unrealistically ambitious expansion 
of industry and infrastructure and a massive military buildup 
greatly strained Iran's human and institutional resources and 
caused severe economic and social dislocation. Widespread 
official corruption, rapidly increasing inflation, and a growing 
income gap between the wealthier and the poorer social strata 
fed public dissatisfaction. 

In response, the government attempted to provide the work- 
ing and middle classes with some immediate and tangible ben- 
efits of the country's new oil wealth. The government 
nationalized private secondary schools and community col- 
leges, made secondary education free for all Iranians, started a 
free meal program in schools, and extended financial support 
to university students. It also reduced income taxes, inaugu- 
rated an ambitious health insurance plan, and accelerated 
implementation of a program introduced in 1972 under which 
industrialists were required to sell 49 percent of the shares of 
their companies to their employees. The programs were badly 
implemented, however, and did not adequately compensate for 
the deteriorating economic position of civil servants and the 
urban working class. To deal with inflation and soaring housing 
costs, the government adopted policies that appeared threaten- 
ing to the propertied classes and to the people of the bazaars, 
businesspeople, and industrialists (see Urban Society, ch. 2). 



46 



Historical Setting 



For example, in an effort to bring down rents, municipalities 
were empowered to take over empty houses and apartments 
and to rent and administer them in place of the owners. In an 
effort to bring down prices in 1975 and 1976, the government 
declared a war on profiteers, arrested and fined thousands of 
shopkeepers and petty merchants, and sent two prominent 
industrialists into exile. 

Moreover, by 1978 there were 60,000 foreigners in Iran — 
45,000 of them Americans — engaged in business or in military 
training and advisory missions. This foreign presence tended 
to intensify the perception that the shah's modernization pro- 
gram was threatening the society's Islamic and Iranian values 
and identity. Increasing political repression and the establish- 
ment of a one-party state in 1975 further alienated the edu- 
cated classes. 

Beginning in early 1977, the shah took a number of steps to 
counter both domestic and foreign criticism of Iran's human 
rights record. Amnesty International and other human rights 
organizations were drawing attention to mistreatment of politi- 
cal prisoners and violation of the rights of the accused in Ira- 
nian courts. U.S. president Jimmy Carter, who took office in 
January 1977, also was making an issue of human rights viola- 
tions in countries associated with the United States. The shah 
released political prisoners and announced new regulations to 
protect the legal rights of civilians brought before military 
courts. In July the shah replaced Hoveyda, his prime minister 
of 12 years, with Jamshid Amuzegar, who had served for more 
than a decade in various cabinet posts. However, Amuzegar 
also became unpopular, as he attempted to slow the overheated 
economy with measures that, however necessary, triggered a 
downturn in employment and private-sector profits. 

Leaders of the moderate opposition, professional groups, 
and the intelligentsia took advantage of the political opening 
allowed by the shah to organize and speak out. They addressed 
open letters to prominent officials demanding adherence to 
the constitution and restoration of basic freedoms. Lawyers, 
judges, university professors, and writers formed professional 
associations to press these demands. The National Front, the 
IFM, and other political groups resumed activity. 

The protest movement took a new turn in January 1978, 
when a government-inspired article in Ettelaat, one of the coun- 
try's leading newspapers, cast doubt on Khomeini's piety and 
suggested that he was a British agent. Senior clerics denounced 



47 



Iran: A Country Study 



the article. Seminary students took to the streets in Qom and 
clashed with police, and a number of demonstrators were 
killed. On February 18, mosque services and demonstrations 
were held in several cities to honor those killed in the Qom 
demonstrations. In Tabriz these demonstrations turned violent, 
and it was two days before order could be restored. By the sum- 
mer, riots and antigovernment demonstrations had swept doz- 
ens of towns and cities. 

The cycle of protests that began in Qom and Tabriz in 1978 
differed in nature, composition, and intent from the protests 
of the preceding year. The 1977 protests were primarily the 
work of middle-class intellectuals, lawyers, and secular politi- 
cians. They took the form of letters, resolutions, and declara- 
tions and were aimed at the restoration of constitutional rule. 
The protests that rocked Iranian cities in the first half of 1978, 
by contrast, were led by religious elements and were centered 
on mosques and religious events. They drew on traditional 
groups in the bazaar and the urban working class for support. 
The protesters used a form of calculated violence to achieve 
their ends, attacking and destroying carefully selected targets 
that represented objectionable features of the regime: night- 
clubs and cinemas, as symbols of moral corruption and the 
influence of Western culture; banks, as symbols of economic 
exploitation; offices of Rastakhiz (the party created by the shah 
in 1975 to run the one-party state) and police stations, as sym- 
bols of political repression. The protests, moreover, aimed at 
fundamental change: In slogans and leaflets, the protesters 
demanded the shah's removal, depicting Khomeini as their 
leader and an Islamic state as their ideal. From his exile in Iraq, 
Khomeini continued to urge further demonstrations, rejected 
compromise with the regime, and demanded the overthrow of 
the shah. 

The government's position deteriorated further in August 
1978, when more than 400 people died in a fire at the Rex Cin- 
ema in Abadan. The fire was started by religiously inclined stu- 
dents, but the opposition carefully cultivated a widespread 
conviction that it was the work of SAVAK agents. Following the 
Rex Cinema fire, the shah removed Amuzegar and named Jafar 
Sharif Emami prime minister. Sharif Emami, a former prime 
minister and a trusted royalist, had for many years served as 
president of the Senate. He eased press controls and permitted 
more open debate in the Majlis. He released a number of 
imprisoned clerics, revoked the imperial calendar, closed gam- 



48 



Historical Setting 



bling casinos, and obtained from the shah the dismissal from 
court and public office of members of the Baha'i faith, a reli- 
gion to which the clerics strongly objected (see Non-Muslim 
Minorities, ch. 2). These measures, however, did not quell pub- 
lic protests. On September 4, more than 100,000 took part in 
the public prayers to mark the end of Ramazan (Ramadan), 
the Muslim fasting month. Growing antigovernment demon- 
strations continued for the next two days, taking on an increas- 
ingly radical tone. After the government declared martial law 
in Tehran and 11 other cities, troops fired into a crowd of dem- 
onstrators in Tehran's Jaleh Square. A large number of protest- 
ers, certainly many more than the official figure of 87, were 
killed. The day of the Jaleh Square shooting came to be known 
as "Black Friday." The shootings further radicalized the opposi- 
tion movement and made compromise with the regime, even 
by the moderates, less likely. 

Khomeini, expelled from Iraq, went to France in October 
and established his headquarters at Neauphle-le-Chateau, out- 
side Paris. His arrival in France gave Khomeini and his move- 
ment exposure in the world press and media. It made possible 
easy telephone communication with lieutenants in Iran, thus 
permitting better coordination of the opposition movement. It 
also allowed Iranian political and religious leaders to visit him 
for direct consultations. One such visitor, National Front leader 
Karim Sanjabi, met with Khomeini in early November 1978 and 
issued a three-point statement that for the first time committed 
the National Front to the Khomeini demand for the deposition 
of the shah and the establishment of a "democratic and 
Islamic" government. 

In September, workers in the public sector, including the oil 
industry, had begun striking on a large scale. Their demands 
for improved salaries and benefits quickly escalated into 
demands for changes in the political system. The unavailability 
of fuel oil and freight transport and shortages of raw materials 
resulting from a customs strike, meanwhile, led to a shutdown 
of most private-sector industries in November. 

On November 5, after violent demonstrations in Tehran, the 
shah replaced Prime Minister Sharif Emami with General 
Gholam Reza Azhari, commander of the Imperial Guard. 
Addressing the nation for the first time in many months, the 
shah declared that he had heard the people's "revolutionary 
message," promised to correct past mistakes, and urged a 
period of quiet to permit promised reforms. Presumably to pla- 



49 



Iran: A Country Study 

cate public opinion, the shah allowed the arrest of 132 former 
leaders and government officials, including former Prime Min- 
ister Hoveyda, an ex-chief of SAVAK, and several former cabi- 
net ministers. He also ordered the release of more than 1,000 
political prisoners, including a Khomeini associate, Ayatollah 
Hosain Ali Montazeri. 

The appointment of Azhari as prime minister brought about 
a short-lived abatement of the strike fever, and oil production 
improved. Khomeini dismissed the shah's promises as worth- 
less, however, and called for continued protests. The strikes 
resumed, virtually shutting down the government, and clashes 
between demonstrators and troops became a daily occurrence. 
On December 9 and 10, 1978, several hundred thousand per- 
sons participated in antiregime marches in Tehran and the 
provinces. 

During December the shah finally began exploratory talks 
with members of the moderate opposition. Discussions with 
the National Front's Karim Sanjabi proved unfruitful; Sanjabi 
was bound by his agreement with Khomeini. At the end of 
December, another National Front leader, Shapour Bakhtiar, 
agreed to form a government on condition that the shah leave 
the country. Bakhtiar secured a vote of confidence from the 
two houses of the Majlis on January 3, 1979, and presented his 
cabinet to the shah three days later. The shah left the country 
on January 16. As his aircraft took off, celebrations broke out 
across the country. 

The Bakhtiar Government 

Once installed as prime minister, Bakhtiar took several mea- 
sures designed to appeal to elements in the opposition move- 
ment. He lifted restrictions on the press; the newspapers, on 
strike since November, resumed publication. He freed all 
remaining political prisoners and promised the dissolution of 
SAVAK, the lifting of martial law, and free elections. He 
announced Iran's withdrawal from CENTO, canceled arms 
orders worth US$7 billion from the United States, and 
announced that Iran would no longer sell oil to South Africa or 
Israel. Although Bakhtiar won the qualified support of leading 
moderate clerics such as Ayatollah Kazem Shariatmadari, he 
did not win the support of Khomeini and the main opposition 
elements, who were now committed to ending the monarchy 
and establishing a new political order. The National Front 
expelled Bakhtiar, and Khomeini declared his government ille- 



50 



Historical Setting 



gal. Some normalcy returned to the bazaar, and oil production 
improved slightly in the wake of Bakhtiar's appointment. But 
strikes in both the public and private sectors and large-scale 
demonstrations against the government continued. When, on 
January 29, 1979, Khomeini called for a street "referendum" on 
the monarchy and the Bakhtiar government, there was a mas- 
sive turnout. 

Khomeini returned to Iran from Paris on February 1, 
received a rapturous welcome from millions of Iranians, and 
announced that he would "smash in the mouth of the Bakhtiar 
government." Khomeini established his headquarters in a girls' 
secondary school in Tehran, and the komiteh-ye imam, or the 
imam's committee (imam — see Glossary), coordinated opposi- 
tion activity. On February 5, Khomeini named Mehdi Bazargan 
prime minister of a provisional government, reinforcing the 
conditions of dual authority that had characterized the closing 
days of the Pahlavi monarchy. In many large urban centers, 
local komitehs (revolutionary committees) had assumed respon- 
sibility for municipal functions, including neighborhood secu- 
rity and the distribution of such basic necessities as fuel oil. 
Government ministries and such services as the customs and 
mail service remained largely paralyzed. Bakhtiar's cabinet 
ministers proved unable to assert their authority or, in many 
instances, even to enter their offices. The loyalty of the armed 
forces was being seriously eroded by months of confrontation 
with protesters, and desertions were increasing. Clandestine 
contacts under way between Khomeini's representatives and a 
number of military commanders were being encouraged by 
U.S. ambassador William Sullivan, who had no confidence in 
the Bakhtiar government and believed that only an accommo- 
dation between the armed forces and the Khomeini camp 
could assure stability in Iran. 

On February 8, uniformed airmen appeared at Khomeini's 
home and publicly pledged their allegiance to him. On Febru- 
ary 9, air force technicians at the Doshan Tappeh Air Base out- 
side Tehran mutinied. The next day, the air base arsenal was 
opened, and weapons were distributed to crowds outside. Over 
the next 24 hours, revolutionaries seized police barracks, pris- 
ons, and public buildings. On February 11, a group of 22 
senior military commanders met and announced that the 
armed forces would observe neutrality in the confrontation 
between the government and the people. The army's with- 
drawal from the streets was tantamount to a withdrawal of sup- 



51 



Iran: A Country Study 

port for the Bakhtiar government and acted as a trigger for a 
general uprising. By late afternoon on February 11, Bakhtiar 
was in hiding, and key points throughout the capital were in 
rebel hands. The Pahlavi monarchy had collapsed. 

The Revolution 

Bazargan and the Provisional Government 

Mehdi Bazargan became the first prime minister of the revo- 
lutionary regime in February 1979. Bazargan, however, headed 
a government that controlled neither the country nor even its 
own bureaucratic apparatus. Central authority had broken 
down. Hundreds of semi-independent revolutionary commit- 
tees, not answerable to central authority, were performing a 
variety of functions, both lawful and unlawful, in major cities 
and towns across the country. The committees policed neigh- 
borhoods in urban areas, guarded prisons and government 
buildings, made unauthorized arrests, served as execution 
squads of the revolutionary tribunals, intervened in labor-man- 
agement disputes, and seized property. Factory workers, civil 
servants, white-collar employees, and students often were in 
control, demanding a say in running their organizations and 
choosing their chiefs. Governors, military commanders, and 
other officials appointed by the prime minister frequently were 
rejected by the lower ranks or local inhabitants. A range of 
political groups, from the far left to the far right, from secular 
to ultra-Islamic, were vying for political power and demanding 
immediate action from the prime minister. Clerics led by Aya- 
tollah Mohammad Beheshti established the Islamic Republican 
Party (IRP), which emerged as the organ of the clerics around 
Khomeini and the major political organization in the country. 
Not to be outdone, followers of the more moderate senior 
cleric Shariatmadari established the Islamic People's Republi- 
can Party (IPRP), with a base in Azarbaijan Province, Shariat- 
madari's home province. 

Multiple centers of authority emerged within the govern- 
ment. As the Leader, Khomeini did not consider himself to be 
bound by the government. He alone made policy pronounce- 
ments, named personal representatives to key government 
organizations, established new institutions, and announced 
decisions without consulting his prime minister. The prime 
minister had to share power with the Revolutionary Council, 
which Khomeini had established in January 1979. The cabinet 



52 



Historical Setting 



was to serve as the executive authority, but the Revolutionary 
Council exercised supreme decision-making and legislative 
authority. 

Differences quickly emerged between the cabinet and the 
Revolutionary Council over appointments, the role of the revo- 
lutionary courts and other revolutionary organizations, foreign 
policy, and the general direction of the Revolution. Bazargan 
and his cabinet colleagues were eager for a return to normalcy 
and rapid reassertion of central authority. Clerics of the Revo- 
lutionary Council, more responsive to the Islamic and popular 
temper of the mass of their followers, generally favored more 
radical economic and social measures. They mobilized the 
street crowds and the revolutionary organizations to achieve 
their ends. In July 1979, clerical members of the Revolutionary 
Council joined the government, and cabinet officers were 
given seats on the council, but this failed to ease tensions. 

The revolutionaries quickly turned their attention to bring- 
ing to trial and punishing members of the former regime 
whom they considered responsible for political repression, cor- 
ruption, damaging economic policies, and the foreign exploi- 
tation of Iran. A revolutionary court set to work almost 
immediately in Tehran. Revolutionary courts were established 
in provincial centers shortly thereafter. The Tehran court 
issued its first death sentences for four of the shah's generals 
on February 16, 1979; the four were executed by firing squad 
on the roof of the building housing Khomeini's headquarters. 
More executions, of military and police officers, SAVAK agents, 
cabinet ministers, Majlis deputies, and officials of the shah's 
regime, followed on an almost daily basis. 

The activities of the revolutionary courts became a focus of 
intense controversy. Left-wing political groups and populist 
clerics pressed hard for "revolutionary justice" for miscreants 
of the former regime. But lawyers and human rights groups 
protested the arbitrary nature of the revolutionary courts, the 
vagueness of charges, and the absence of defense lawyers. Baz- 
argan, too, was critical of the courts' activities. At the prime 
minister's insistence, the revolutionary courts suspended their 
activities on March 14, 1979; but new regulations issued on 
April 5 formalized the revolutionary courts and authorized 
them to try a variety of broadly defined crimes, such as "sowing 
corruption on earth," "crimes against the people," and "crimes 
against the Revolution." The courts resumed their work on 
April 6. The following day, despite international pleas for clem- 



53 



Iran: A Country Study 



ency, Hoveyda, who had served as the shah's prime minister for 
12 years, was put to death. Executions of other former regime 
officials resumed. Beginning in August 1979, the courts tried 
and passed death sentences on members of ethnic minorities 
involved in antigovernment movements. Some 550 persons had 
been executed by the time Bazargan resigned in November 
1979, having failed to bring the revolutionary committees 
under his control. Despite abuses committed by the revolution- 
ary committees, members of the Revolutionary Council wanted 
to control the committees rather than eliminate them. In Feb- 
ruary 1979, the council appointed a senior cleric as head of the 
Tehran revolutionary committee and charged him with super- 
vising the committees countrywide. The revolutionary commit- 
tees endured, serving as one of the coercive arms of the 
revolutionary government. 

In May 1979, Khomeini authorized the establishment of the 
Islamic Revolutionary Guard Corps or Revolutionary Guards 
(Pasdaran; in full, Pasdaran-e Enghelab-e Islami). The Revolu- 
tionary Guards organization was conceived by the men around 
Khomeini as a military force loyal to the Revolution and to the 
clerical leaders, a counterbalance to the regular army, and a 
weapon against the guerrilla organizations of the left, which 
also were arming. The force expanded rapidly. 

Two other important organizations were established in the 
regime's formative period. In March 1979, Khomeini estab- 
lished the Foundation of the Disinherited (Bonyad-e Mostaza- 
fin; see Welfare, ch. 2). The organization was to take charge of 
the assets of the shah's philanthropic Pahlavi Foundation and 
to use the proceeds from their liquidation to assist low-income 
groups. The new foundation eventually became one of the larg- 
est conglomerates in the country, controlling hundreds of 
expropriated and nationalized factories, trading firms, farms, 
and apartment and office buildings, as well as two large news- 
paper chains. Crusade for Reconstruction (Jihad-e Sazandegi 
or Jihad), established in June, recruited young people to build 
clinics, local roads, schools, and similar facilities in villages and 
rural areas. This organization also grew rapidly, assuming func- 
tions in rural areas that had previously been handled by the 
Planning and Budget Organization (which had replaced the 
Plan Organization in 1973) and the Ministry of Agriculture. 

In March 1979, three different disputes broke out in differ- 
ent parts of Iran, concerning, respectively, the Turkmens, the 
Kurds, and the Arabic-speaking population of Khuzestan Prov- 



54 



Historical Setting 



ince (see Languages and Peoples, ch. 2). The disputes in the 
Turkmen region of Gorgan Province were over land rather 
than claims for Turkmen cultural identity or autonomy. In 
Khuzestan, the center of Iran's oil industry, members of the 
Arabic-speaking population demanded a larger share of oil rev- 
enues for the region, more jobs for local inhabitants, the use of 
Arabic as a semiofficial language, and a larger degree of local 
autonomy. Both these disturbances were put down by the use 
of troops and the arrest of leaders and activists. 

The Kurdish uprising proved more persistent and deeply 
rooted. The Kurdish leaders were disappointed that the Revo- 
lution had not brought them local autonomy. Scattered fight- 
ing began in March 1979 between government and Kurdish 
forces; attempts at negotiation proved abortive. The Kurdistan 
Democratic Party, led by Abdol Rahman Qasemlu, and a more 
radical group led by Sheikh Ezz ad Din Husseini, demanded 
the enlargement of the Kurdistan region to include all Kurd- 
ish-speaking areas in Iran and considerable financial, adminis- 
trative, linguistic, and law enforcement autonomy, with the 
central government limited to national defense, foreign affairs, 
and central banking functions. With the rejection of these 
demands, serious fighting broke out in August 1979. Khomeini 
used the army against other Iranians for the first time since the 
Revolution. No settlement was reached with the Kurds during 
Bazargan's tenure as prime minister. 

With the Bazargan government powerless, control over secu- 
rity passed into the hands of clerics in the Revolutionary Coun- 
cil and the IRP, who ran the revolutionary courts and had 
influence with the Revolutionary Guards, the revolutionary 
committees, and the club-wielding hezbollahis (see Glossary), or 
"followers of the party of God." The clerics deployed these 
forces to curb rival political organizations. In June 1979, the 
Revolutionary Council promulgated a restrictive press law. 
More than 40 opposition newspapers were closed down in 
August. The Revolutionary Council proscribed the National 
Democratic Front, a newly organized left-of-center political 
movement, and issued a warrant for the arrest of its leader. 
Hezbollahis closed the Tehran headquarters of the Fedayan and 
the Mojahedin organizations. On September 8, the two largest 
newspaper enterprises in the country, Kayhan and Ettelaat, were 
expropriated, with control transferred to the Foundation for 
the Disinherited. 



55 



Iran: A Country Study 

In June and July 1979, the Revolutionary Council also passed 
a number of major economic measures, whose effect was to 
transfer considerable private-sector assets to the state. It nation- 
alized banks, insurance companies, major industries, and cer- 
tain categories of urban land; expropriated the wealth of 
leading business and industrial families; and appointed state 
managers to run many private-sector industries and other pri- 
vate companies. 

The New Constitution 

Khomeini had charged the provisional government with the 
task of drawing up a draft constitution. A step in this direction 
was taken on March 30 and 31, 1979, when a national referen- 
dum was held to determine the country's political system. The 
only form of government on the ballot was an Islamic republic, 
and voting was not by secret ballot. The government reported 
more than 98 percent in favor; Khomeini proclaimed the estab- 
lishment of the Islamic Republic of Iran on April 1, 1979. 

The provisional government unveiled a draft constitution on 
June 18. Aside from substituting a president for the monarch, 
the draft did not differ substantially from the 1906 constitution 
and accorded no special role to the clerics in the new state. A 
73-member Assembly of Experts, dominated by clerics and IRP 
supporters, convened on August 18 to consider the draft con- 
stitution. The majority rewrote the constitution to establish the 
basis for the clerical domination of the state and to vest ulti- 
mate authority in Khomeini as the faqih, the Islamic jurispru- 
dent to be known as the Leader of the Revolution and as the 
heir to the mantle of the Prophet. Last-minute attempts by cen- 
trist and liberal groups, by Shariatmadari's followers, and by 
Bazargan and some cabinet members to stave off this eventual- 
ity failed. The Assembly of Experts completed its work on 
November 15. The constitution was approved in a national ref- 
erendum on December 2 and 3, once again, according to gov- 
ernment figures, by more than 98 percent of the voters. 
Shariatmadari's followers in Tabriz organized protest demon- 
strations and seized control of the radio station. A potentially 
serious challenge to the dominant clerical hierarchy floun- 
dered, however, when Shariatmadari wavered in his support for 
the protesters, and the pro-Khomeini forces organized massive 
counterdemonstrations in the city. Fearing reprisals, the IPRP 
announced its own dissolution in December. 



56 



Historical Setting 



Few foreign initiatives were possible in the early months of 
the Revolution. The Bazargan government attempted to main- 
tain correct relations with the Persian Gulf states, despite harsh 
denunciations of the Gulf rulers by senior clerics and revolu- 
tionary leaders. Anti-American feeling was widespread and was 
fanned by Khomeini himself, populist preachers, and the left- 
wing parties. Bazargan, however, continued to seek military 
spare parts from Washington and asked for intelligence infor- 
mation on Soviet and Iraqi activities in Iran. Then, on October 
22, 1979, the shah, who was seriously ill, was admitted to the 
United States for medical treatment. The revolutionaries 
feared that the shah would use this visit to the United States to 
secure U.S. support for an attempt to overthrow the Islamic 
Republic. On November 1, Bazargan met with President 
Carter's national security adviser, Zbigniew K. Brzezinski, in 
Algiers, where the two men were attending Independence Day 
celebrations. That same day, hundreds of thousands marched 
in Tehran to demand the shah's extradition, while the press 
denounced Bazargan for meeting with a key U.S. official. On 
November 4, young men who later designated themselves "stu- 
dents of the Imam's line" occupied the U.S. embassy com- 
pound and took U.S. diplomats hostage. Bazargan resigned 
two days later; no prime minister was named to replace him. 

The Revolutionary Council took over the prime minister's 
functions, pending presidential and Majlis elections. The elec- 
tions for a new president were held in January 1980. Abolhasan 
Bani Sadr, an independent associated with Khomeini who had 
written widely on the relationship of Islam to politics and eco- 
nomics, received 75 percent of the vote. 

The Bani Sadr Presidency 

Bani Sadr's program as president was to reestablish central 
authority, phase out the Revolutionary Guards and the revolu- 
tionary courts and committees and have other government 
organizations absorb their functions, reduce the influence of 
the clerical hierarchy, and launch a program for economic 
reform and development. Against the wishes of the IRP, 
Khomeini allowed Bani Sadr to be sworn in as president in Jan- 
uary 1980, before the convening of the Majlis. Khomeini fur- 
ther bolstered Bani Sadr's position by appointing him 
chairman of the Revolutionary Council and delegating to the 
president his own powers as commander in chief of the armed 
forces. On the eve of the Iranian New Year on March 20, 



57 



Iran: A Country Study 



Khomeini issued a message to the nation designating the com- 
ing year as "the year of order and security" and outlining a pro- 
gram reflecting Bani Sadr's own priorities. 

However, like Bazargan before him, Bani Sadr found that he 
was competing for primacy with the clerics and activists of the 
IRP. Bani Sadr failed to secure the dissolution of the Revolu- 
tionary Guards and the revolutionary courts and committees. 
He also failed to establish control over the judiciary or the 
radio and television networks. Khomeini appointed IRP mem- 
bers Ayatollah Mohammad Beheshti as chief justice and Ayatol- 
lah Abdol Karim Musavi Ardabili as prosecutor general. Bani 
Sadr's appointees to head the state broadcasting services and 
the Revolutionary Guards were forced to resign within weeks of 
their appointments. 

Parliamentary elections were held in two stages, in March 
and May 1980, amid charges of fraud. The official results gave 
the IRP and its supporters 130 of 241 seats decided; elections 
were not completed in all 270 constituencies. Candidates asso- 
ciated with Bani Sadr and with Bazargan's IFM each won a 
handful of seats; other left-of-center secular parties fared no 
better. The Majlis began its deliberations in June. Ali Akbar 
Hashemi Rafsanjani, a cleric and founding member of the IRP, 
was elected Majlis speaker. After a two-month deadlock 
between the president and the Majlis over the selection of a 
prime minister, Bani Sadr was forced to accept the IRP candi- 
date, Mohammad Ali Rajai; after a long standoff, Bani Sadr was 
forced to accept IRP candidates for many key cabinet positions 
as well. 

The president's inability to control the revolutionary courts 
and the persistence of revolutionary temper were both demon- 
strated in May 1980, when executions, which had become rare 
in the previous few months, began again on a large scale. Some 
900 executions were carried out, most of them between May 
and September. Meanwhile, a remark by Khomeini in June 
1980 that "royalists" were still to be found in government 
offices led to a new wave of purges. Some 4,000 civil servants 
and between 2,000 and 4,000 military officers lost their jobs 
before the purges ended. Around 8,000 military officers had 
been dismissed or retired in previous purges. 

The Kurdish problem proved intractable. Renewed negotia- 
tions failed when Kurdish leaders refused to compromise on 
their demand for autonomy, and fighting resumed. Bani Sadr's 
various attempts to resolve the American hostage crisis also 



58 





Voters cast their ballots 
in the presidential election, January 1 980. 

Copyright Lehtikuva/PHOTRI 




5< 



Iran: A Country Study 



proved abortive. The "students of the Imam's line" were using 
the hostage issue and documents found in the embassy to radi- 
calize the public temper, challenge the authority of the presi- 
dent, and undermine the reputations of moderate politicians 
and public figures. The crisis had shattered relations with the 
United States and was badly straining ties with West European 
countries. The shah, meantime, had made his home in Pan- 
ama, but, fearing extradition, he abruptly left for Egypt in 
March 1980, where he died four months later. 

In April 1980, the United States attempted unsuccessfully to 
rescue the hostages by landing aircraft and troops near Tabas 
in eastern Iran. Radical factions in the IRP and left-wing groups 
charged that Iranian officers opposed to the Revolution had 
secretly helped the U.S. aircraft to escape radar detection. Bani 
Sadr prevented another purge of the military but was forced to 
reshuffle the top military command. In June the chief judge of 
the Army Military Revolutionary Tribunal announced the dis- 
covery of an antigovernment plot centered on the military base 
in Piranshahr in Kurdistan Province. Twenty-seven junior and 
warrant officers were arrested. In July the authorities 
announced that they had uncovered a plot centered on the 
Shahrokhi Air Base in Hamadan Province. Ten of the alleged 
plotters were killed when members of the Revolutionary 
Guards broke into their headquarters. Approximately 300 offic- 
ers, including two generals, were arrested. The government 
charged the accused with plotting to overthrow the state and 
seize power in the name of exiled former prime minister Bakh- 
tiar. As many as 140 officers were shot on orders of the military 
tribunal; wider purges of the armed forces followed. 

In September 1980, perhaps believing that the hostage crisis 
could serve no further diplomatic or political end, the Rajai 
government opened secret talks with U.S. representatives in 
West Germany. The talks continued for the next four months, 
with the Algerians acting as intermediaries. The hostages were 
released on January 20, 1981, concurrently with Ronald W. 
Reagan's inauguration as president of the United States. In 
return, the United States released more than US$11 billion in 
Iranian funds that had been frozen by presidential order. Iran 
also agreed to repay US$5.1 billion in syndicated and nonsyndi- 
cated loans owed to U.S. and foreign banks and to place 
another US$1 billion in an escrow account, pending the settle- 
ment of claims filed against Iran by U.S. firms and citizens. 
These claims, and Iranian claims against U.S. firms, were adju- 



60 



Historical Setting 



dicated by a special tribunal of the International Court of Jus- 
tice at The Hague, established under the terms of what came to 
be known as the Algiers Agreement. 

One incentive for Iran to settle the hostage crisis was the 
onset of full-scale hostilities with Iraq in September 1980. The 
conflict stemmed from Iraqi anxieties that the fever of the Ira- 
nian Revolution would infect Iraq's Shia Muslims, who consti- 
tuted a majority of Iraq's population, The Iraqi president, 
Saddam Hussein, also desired to undo the 1975 Algiers Agree- 
ment (not to be confused with the agreement resulting from 
the 1980-81 United States-Iran negotiations) in order to bring 
about the overthrow of the Khomeini regime and to establish a 
more friendly government in Iran. On September 17, he abro- 
gated the Algiers Agreement. Five days later, Iraqi troops and 
aircraft began a massive invasion of Iran (see fig. 4). 

The war did nothing to moderate the friction between Bani 
Sadr and the Rajai government, with its clerical and IRP back- 
ers. Bani Sadr championed the cause of the army; his IRP rivals 
championed the cause of the Revolutionary Guards. Bani Sadr 
accused the Rajai government of hampering the war effort; the 
prime minister and his backers accused the president of plan- 
ning to use the army to seize power. The prime minister also 
fought the president over control of foreign and domestic eco- 
nomic policy. In late 1980, Bani Sadr attempted to persuade 
Khomeini to dismiss the Rajai government and dissolve the 
Majlis, the Supreme Judicial Council, and the Guardians Coun- 
cil and to give him, as president, wide powers to run the coun- 
try during the war emergency. Khomeini refused. 

Supporters of Bani Sadr and others critical of the activities of 
the IRP and the revolutionary courts and committees orga- 
nized rallies in November and December in Mashhad, Esfahan, 
Tehran, and Gilan. In December, merchants of the Tehran 
bazaar associated with the National Front called for the resig- 
nation of the Rajai government. In February 1981, Bazargan 
denounced the government at a mass rally. A group of 133 writ- 
ers, journalists, and academics issued a letter protesting the 
suppression of basic freedoms. Senior clerics questioned the 
legitimacy of the revolutionary courts, widespread property 
confiscations, and the power exercised by Khomeini as faqih. 
The IRP retaliated by using its hezbollahi gangs to break up Bani 
Sadr rallies in various cities and to harass opposition organiza- 
tions; the offices of Bani Sadr's newspaper, Enqelab-e Islami, and 



61 



Iran: A Country Study 




Figure 4. Initial Iraqi Attack on Iran, September-November 1980 

the IFM newspaper, Mizan, were smashed and the newspapers 
closed down; prominent Bani Sadr supporters were arrested. 

Khomeini's various attempts to mediate the differences 
between Bani Sadr and the Rajai government and the IRP 
failed. In May 1981, the Majlis passed measures to permit the 
prime minister to appoint caretakers to ministries still lacking a 
minister, to deprive the president of his veto power, and to 
allow the prime minister rather than the president to appoint 
the governor of the Central Bank of Iran. Within days the gov- 
ernor was replaced by a Rajai appointee. 

By the end of May, Bani Sadr appeared to be losing 
Khomeini's support as well. On June 10, Khomeini removed 
Bani Sadr from his post as the acting commander in chief of 
the military. On June 12, a motion for the impeachment of the 



62 



Historical Setting 



president was presented by 120 deputies. Soon afterward, fear- 
ing for his life, Bani Sadr went into hiding. When the Mojahe- 
din called for "revolutionary resistance in all its forms," the 
government responded harshly. Twenty-three protesters were 
executed on June 20 and 21, as the Majlis debated the motion 
for impeachment. On June 21, with 30 deputies absenting 
themselves or abstaining, the Majlis decided for impeachment 
by a vote of 177 to one. The revolutionary movement had 
brought together a coalition of clerics, middle-class liberals, 
and secular radicals against the shah. The impeachment of 
Bani Sadr represented the triumph of the clerical party over 
the other members of this coalition. 

Terror and Repression 

Following the fall of Bani Sadr, opposition elements 
attempted to reorganize so as to overthrow the government by 
force. The regime responded with a policy of repression and 
terror. Bani Sadr remained in hiding for several weeks, formed 
an alliance with Mojahedin leader Masoud Rajavi, and in July 
1981 escaped with Rajavi from Iran to France. In Paris Bani 
Sadr and Rajavi announced the establishment of the National 
Council of Resistance (NCR) and committed themselves to 
work for the overthrow of the Khomeini regime. The Kurdistan 
Democratic Party, the National Democratic Front, and a num- 
ber of other small groups and individuals subsequently 
announced their association with the NCR. 

Meanwhile, violent opposition to the government contin- 
ued. On June 28, 1981, a powerful bomb exploded at the head- 
quarters of the IRP while a meeting of party leaders was in 
progress. Seventy-three persons were killed, including the chief 
justice and party secretary general Mohammad Beheshti, four 
cabinet ministers, 27 Majlis deputies, and several other govern- 
ment officials. Elections for a new president were held on July 
24, and Rajai, the prime minister, was elected to the post. On 
August 5, the Majlis approved Rajai's choice of Mohammad 
Javad Bahonar as prime minister. 

Rajai and Bahonar, along with the chief of the Tehran 
police, lost their lives when a bomb went off during a meeting 
at the office of the prime minister on August 30. The Majlis 
named another cleric, Mohammad Reza Mahdavi Kani, as 
interim prime minister. In a new round of elections on Octo- 
ber 2, Sayyid Ali Khamenei was elected president. On October 
28, the Majlis elected Mir Hosain Musavi, a protege of the late 



63 



Iran: A Country Study 

Mohammad Beheshti, as prime minister. The Mojahedin 
claimed responsibility for a spate of other assassinations. 
Among those killed in the space of a few months were the Fri- 
day prayer leaders in the cities of Tabriz, Kerman, Shiraz, Yazd, 
and Bakhtaran; a provincial governor; the warden of the noto- 
rious Evin Prison in Tehran; the chief ideologue of the IRP; 
and several revolutionary court judges and Majlis deputies. 

In September 1981, expecting to spark a general uprising, 
the Mojahedin sent their young followers into the streets to 
demonstrate against the government and deployed their very 
limited military units for armed attacks against the Revolution- 
ary Guards. Smaller left-wing opposition groups, including the 
Fedayan, attempted similar guerrilla activities. In July 1981, 
members of the Union of Communists tried to seize control of 
the Caspian town of Amol. At least 70 guerrillas and Revolu- 
tionary Guards members were killed before the uprising was 
put down. The government responded to the armed challenge 
of the guerrilla groups with widespread arrests, jailings, and 
executions. Fifty executions a day became routine; there were 
days when more than 100 persons were executed. Amnesty 
International documented 2,946 executions in the 12 months 
following Bani Sadr's impeachment; this probably was a conser- 
vative figure. The pace of executions slackened considerably at 
the end of 1982, partly as a result of a deliberate government 
decision but primarily because, by then, the back of the armed 
resistance movement had largely been broken. 

By the end of 1983, key leaders of the Fedayan, Peykar (a 
Marxist-oriented splinter group of the Mojahedin), the Union 
of Communists, and the Mojahedin in Iran had been killed; 
thousands of the rank and file had been executed or were in 
prison; and the organizational structure of these movements 
was gravely weakened. Only the Mojahedin managed to survive 
by moving its headquarters to Paris. 

During this period, the government was also able to crush its 
other active and potential political opponents and armed 
groups. In June 1982, the authorities captured Khosrow 
Qashqai, who had returned to Iran after the Revolution and 
had led his Qashqai tribesmen in a local uprising (see Turkic- 
Speaking Groups, ch. 2). He was tried and publicly hanged in 
October. The government reasserted control over major towns 
in Kurdistan in 1982, and Kurdish armed resistance in the 
countryside came to an end in the following year. 



64 



Historical Setting 



In the fall of 1982, former Khomeini aide and foreign minis- 
ter Sadeq Qotbzadeh and some 70 military officers were tried 
and executed for allegedly plotting to kill Khomeini and over- 
throw the state. The government implicated the respected reli- 
gious leader Shariatmadari in the alleged plot. In an 
unprecedented move, members of the Association of the Semi- 
nary Teachers of Qom voted to strip Shariatmadari of his title 
of marja-e taqlid (a jurist who particularly merits emulation), 
and he was placed under virtual house arrest. 

Moves to crush opposition gave freer rein to the Revolution- 
ary Guards and the revolutionary committees. Members of 
these organizations entered homes, made arrests, conducted 
searches, and confiscated goods at will. The government orga- 
nized "Mobile Units of God's Vengeance" to patrol the streets 
and to impose Islamic dress and Islamic codes of behavior. 
Instructions issued by Khomeini in December 1981 and in 
August 1982 admonishing the revolutionary organizations to 
exercise proper care in entering homes and making arrests 
were ignored. "Manpower renewal" and "placement" commit- 
tees in government ministries and offices resumed large-scale 
purges in 1982. 

By the end of 1982, the country was experiencing a reaction 
against the widespread executions and the arbitrary actions of 
the revolutionary organizations and purge committees. Also, 
the government realized that domestic insecurity was exacer- 
bating economic difficulties. Accordingly, in December 1982 
Khomeini issued an eight-point decree prohibiting the revolu- 
tionary organizations from entering homes, making arrests, 
conducting searches, and confiscating property without legal 
authorization. He also banned unauthorized tapping of tele- 
phones, interference with citizens in the privacy of their 
homes, and unauthorized dismissals from the civil service. He 
urged the courts to respect the life, property, and honor of citi- 
zens. Although the decree did not end repression, it led to a 
marked decrease in executions, tempered the worst abuses of 
the Revolutionary Guards and the revolutionary committees, 
and brought a measure of security to individuals not engaged 
in opposition activity. 

However, the December decree implied no increased toler- 
ance of the political opposition. For instance, the Tudeh ini- 
tially had secured a measure of freedom by declaring loyalty to 
Khomeini and supporting the clerics against liberal and left- 
wing opposition groups. But the government began a crack- 



65 



Iran: A Country Study 



down on the Tudeh in 1981, branding its members agents of a 
foreign power. In February 1983, the government arrested 
Tudeh leader Nureddin Kianuri, other members of the party 
central committee, and more than 1,000 party members. The 
party was proscribed, and Kianuri was produced on television 
to confess to spying for the Soviet Union and to "espionage, 
deceit, and treason." 

Consolidation of the Revolution 

As the government eliminated the political opposition and 
successfully prosecuted the war with Iraq, it also took further 
steps to consolidate and institutionalize its authority. It reorga- 
nized the Revolutionary Guards, the Crusade for Reconstruc- 
tion, and the state security organization as full ministries 
(respectively, in 1982, 1983, and 1984); placed the revolution- 
ary committees under the Ministry of Interior; and nominally 
incorporated the revolutionary courts into the regular court 
system. These measures met with only limited success in reduc- 
ing the considerable autonomy and budgetary independence 
of the revolutionary organizations. 

In 1985 the Assembly of Experts (not to be confused with 
the constituent assembly that went by the same name), a body 
charged under the constitution with electing Khomeini's suc- 
cessor, agreed to designate its choice, Ayatollah Hosain Ali 
Montazeri, merely as Khomeini's "deputy." This action placed 
Montazeri in line for the succession without actually naming 
him as the heir apparent. 

Elections to the second Majlis were held in the spring of 
1984 and were contested only by candidates of the IRP and 
other groups and individuals in the ruling hierarchy. The sec- 
ond Majlis, more radical in temper than the first, convened in 
May 1984. With some prodding from Khomeini, it gave Mir 
Hosain Musavi a renewed vote of confidence as prime minister. 
In 1985 Khamenei, who was virtually unchallenged, was elected 
to another four-year term as president. 

Opposition to the ruling hierarchy was barely tolerated. Baz- 
argan, as leader of the IFM, continued to protest the suppres- 
sion of basic freedoms. He addressed a letter on these issues to 
Khomeini in August 1984; he also spoke out against the war 
with Iraq and urged a negotiated settlement. In retaliation, in 
February 1985 the hezbollahis smashed the offices of the party, 
and the party newspaper was once again shut down. Bazargan 



66 



Historical Setting 



was denounced from pulpits and was barred from running for 
president in the 1985 election. 

There were, however, increasing signs of factionalism within 
the ruling group itself over questions of social justice, eco- 
nomic policy, the succession, and, to a lesser degree, foreign 
policy and the war with Iraq. The economic policy debate arose 
partly from disagreements over redistribution of wealth and 
partly from differences over the roles of the state and the pri- 
vate sector in the economy. Divisions also arose between the 
Majlis and the Guardians Council, a group composed of senior 
Islamic jurists and other experts in Islamic law that was empow- 
ered by the constitution to veto, or demand the revision of, any 
legislation it considered in violation of the constitution or of 
the precepts of Islam. In this dispute, the Guardians Council 
emerged as the collective champion of private-property rights. 
In the years 1982-85, the Guardians Council vetoed a law that 
would have nationalized foreign trade; the Law for the Expro- 
priation of the Property of Fugitives, which would have allowed 
the state to seize the property of any Iranian living abroad who 
failed to return to Iran; a law for state takeover and distribution 
to farmers of large agricultural landholdings; and a measure 
for state control over the domestic distribution of goods. The 
Guardians Council forced the Majlis to substantially revise a law 
for the state takeover of urban land, giving landowners more 
protection; and in 1984 and 1985, it blocked attempts by the 
Majlis to revive measures for nationalization of foreign trade 
and for major land distribution. However, in 1984 the council 
approved a law, based on Article 49 of the constitution, that 
made all wealth obtained in a manner violating Islamic princi- 
ples subject to confiscation. In 1986, after demanding revi- 
sions, it also approved a limited land-distribution law, under 
which less than 750,000 hectares of land, seized in the turmoil 
immediately following the Revolution and belonging to 
between 5,000 and 5,600 landowners, was distributed to 
approximately 120,000 cultivators. 

The deadlock between the Majlis and the Guardians Council 
led to two significant developments. In an important letter 
addressed to President Khamenei in January 1988 in connec- 
tion with another dispute on economic issues between the Maj- 
lis and the Guardians Council, Khomeini articulated an 
unusually broad — even unlimited — definition of the powers of 
the Islamic state. Such a state, he said, derives its authority from 
the vice regency entrusted by God to the Prophet and rules by 



67 



Iran: A Country Study 



divine sanction. In the interests of the community, Islam, and 
the country, he said, an Islamic government can revoke con- 
tracts it makes with the people, prohibit commercial transac- 
tions considered lawful under Islamic law, and even suspend 
the exercise of the five pillars of the faith required of every 
Muslim. In February 1989, Khomeini appointed an Expediency 
Council (in full, Council for the Discernment of Expediency) 
composed of 12 ex-officio members and his own representa- 
tive, with wide powers to resolve differences between the Majlis 
and the Guardians Council. 

Khomeini's Last Years 

In a series of offensives in the spring and summer of 1982, 
Iran had almost entirely expelled Iraqi forces from Iranian ter- 
ritory. Some in the senior leadership advocated crossing the 
border into Iraq and pursuing the war until the overthrow of 
Saddam Hussein; others argued for ending military action at 
Iran's borders. The advocates of going into Iraq won out, pro- 
longing the war for another five years. Iranian forces secured 
slices of Iraqi territory in offensives in 1983, came close to cut- 
ting the strategic Basra-Baghdad Highway in 1985, and cap- 
tured the Fao Peninsula along the strategic Shatt al Arab in 
February 1986. In January 1987, in Operation Karbala V, its 
largest, best-prepared offensive in five years, Iran seriously 
threatened the port city of Basra. But a decisive victory eluded 
the Iranians. Saddam Hussein retaliated by using aircraft and 
missiles acquired from the Soviet Union and France to renew 
the "tanker war," bomb oil facilities at Khark (Kharg) Island, 
and launch missile and bomb attacks against Iranian cities. He 
also used poison gas against Iranian forces. 

Iran's January 1987 offensive was made possible by arms 
acquired not only from China and the Democratic People's 
Republic of Korea (North Korea) but also from the United 
States. In what came to be known as the Iran-Contra Affair, 
during 1985-86 the Reagan Administration sold to Iran more 
than 2,000 antitank missiles and parts for antiaircraft missile 
systems to fund anticommunist "contra" forces in Nicaragua. 
The arms-for-hostages deal led to contacts between senior Ira- 
nian and U.S. officials. Three U.S. hostages being held in Leba- 
non were released. But the clandestine agreement, leaked to a 
Lebanese weekly in November 1986, proved highly controver- 
sial in Iran and the United States and could not be sustained 
once it became public. In addition, fearing the disruptive 



68 



Historical Setting 



effects on Arab allies of an Iranian victory over Iraq, the 
Reagan Administration changed tack and began to assist Sad- 
dam Hussein with intelligence, financial assistance, some arms, 
and diplomatic support. In July 1987, the United States also 
agreed to reflag and provide escorts for Kuwaiti tankers in the 
Persian Gulf. Iran had begun to target these tankers in retalia- 
tion for Kuwaiti assistance to Iraq's war effort. The arrival of a 
large fleet of U.S. battleships and aircraft carriers, and Saddam 
Hussein's ability to rearm even while Iran was virtually shut out 
of the international arms market, helped tip the balance of the 
war against Iran. Between April and July 1988, with clandestine 
U.S. assistance, Iraqi forces expelled Iranian forces from Iraqi 
territory and went on to retake large swaths of Iranian territory. 
On July 18, 1988, Iran finally accepted UN Resolution 598, 
which called for a cease-fire in place. Khomeini described the 
decision as "more lethal to me than poison." 

The war with Iraq had led the government to seek to repair 
its relations with the international community. As early as Octo- 
ber 1984, Khomeini had endorsed such an initiative. The gov- 
ernment subsequently took steps to improve ties with Turkey 
and Pakistan, Britain and other West European states, and also 
with the Soviet Union. Relations had been strained by the 
Soviet supply of arms to Iraq and the Soviet military presence 
in Afghanistan. But hard-liners in Iran repeatedly undermined 
these efforts. For example, relations with France were again dis- 
rupted when an Iranian embassy employee in Paris was impli- 
cated in bombings in the French capital; relations with Britain 
were damaged when a British diplomat in Tehran was abducted 
and badly beaten after an Iranian consular official was charged 
with shoplifting in Manchester. In February 1989, Khomeini 
wrecked months of careful fence-mending by Rafsanjani in 
Europe by issuing a death sentence against the British novelist 
Salman Rushdie, whose novel The Satanic Verses he deemed 
insulting to the Prophet. 

In March 1989, Khomeini created another crisis by dismiss- 
ing Ayatollah Montazeri as his successor designate, describing 
him as unsuitable for the role of Leader. The two men had 
been very close, but Montazeri had become publicly critical of 
restrictions on the press, the treatment of political prisoners, 
and prison conditions, which he described as "far worse than 
under the Shah." He accused Khomeini of stifling debate and 
losing touch with public opinion. Montazeri also refused 
Khomeini's demand that he disassociate himself from a rela- 



69 



Iran: A Country Study 



tive, Mehdi Hashemi, who used his armed retainers to interfere 
in domestic and foreign affairs. 

The dismissal of Montazeri and the necessity of making 
arrangements for the post-Khomeini period led to the conven- 
ing of a constitutional assembly in May 1989 to consider 
amendments to the constitution. Khomeini named 20 leading 
officials and clerics to the council and invited the Majlis to 
name five others. The assembly made a number of major revi- 
sions to the 1979 constitution, aimed at the centralization of 
authority, enhancement of the powers of the Leader, and solid- 
ification of clerical control of the institutions of the state. The 
constitutional convention completed its work in mid-July. The 
amendments to the constitution were approved in a national 
referendum on July 28, when Rafsanjani also was elected presi- 
dent. 

Khomeini died on June 3, 1989, before the assembly could 
complete its work, and he was buried two days later. The Assem- 
bly of Experts quickly convened and named Khamenei his suc- 
cessor. 

The Post-Khomeini Era 

The Rafsanjani Presidency 

The end of the Iran-Iraq War in 1988, Khomeini's death in 
1989, and the election of Ali Akbar Hashemi Rafsanjani to the 
presidency that same year permitted a turn toward more prag- 
matic policies. The end of the war allowed the government to 
redirect its resources and energies to the long-neglected econ- 
omy. The death of Khomeini gave his lieutenants greater room 
to chart their own course. The amended constitution vested 
expanded powers in the president. As president, Rafsanjani 
emphasized the need to eschew sloganeering and to focus on 
postwar reconstruction, job creation, and economic rational- 
ization. He eased social (though not political) controls at 
home. He also set about repairing Iran's international rela- 
tions. Progress was made in each of these areas; but by Rafsan- 
jani's second term, due to opposition inside the ruling group 
and institutional obstruction, each of these programs was in 
serious trouble. 

The U.S.-led 1990-91 Gulf War to expel Iraq from Kuwait 
yielded Iran immediate benefits. Saddam Hussein was forced 
to evacuate Iranian territory that Iraq had occupied since the 
1988 cease-fire. The Gulf War greatly weakened a better-armed 



70 



Historical Setting 



and menacing enemy. Iranian policy during and after the war 
reflected a new, more moderate strain in foreign policy. Rafsan- 
jani skillfully kept Iran out of the war, in effect (if not in rheto- 
ric) aligning Iran with the aims of the U.S.-led alliance. At the 
end of the war, Iran showed restraint in the limited aid it 
extended to fellow Shias when Saddam Hussein brutally 
crushed an uprising in southern Iraq. 

Rafsanjani used the cover of the war to resume diplomatic 
relations with Morocco, Egypt, and Saudi Arabia. After the 
war, he used Iranian influence with Hizballah to secure the 
release of the remaining American hostages in Lebanon. Iran 
assiduously courted better relations with Turkey, Saudi Arabia, 
Kuwait, and the other Arab states of the Persian Gulf. It muted 
its criticism of the military basing agreement that Kuwait 
signed with the United States and the support that Arab states 
of the Persian Gulf gave to the Oslo peace process (which Iran 
strongly opposed) . Iran did not attempt to stir up Islamic sen- 
timents in the newly independent states of Central Asia and 
the Caucasus. Iran's relations with Turkey remained correct 
despite increased cooperation between the Turkish and Israeli 
militaries. 

As a counterweight to the United States, with which relations 
remained strained, Iran deliberately set out to cultivate other 
major powers, including Russia, China, Japan, Germany, and 
France. This policy proved advantageous. Iran secured sources 
of arms, industrial goods, credits, and occasional diplomatic 
support, despite considerable U.S. pressure for comprehensive 
trade sanctions. 

But Iran did not abandon its support for radical causes 
abroad or for policies that tended to exacerbate relations with 
the countries it was courting. Both pragmatic and ideological 
considerations characterized foreign policy. Iran adopted an 
uncompromisingly hostile stand toward the Oslo peace process 
and the 1993 Palestinian-Israeli agreement, labeling Israel an 
illegitimate state that should cease to exist. Along with Syria, 
Iran was a principal sponsor of Hizballah in Lebanon and sup- 
ported Hizballah's military arm with money, arms, and train- 
ing. Hizballah used these resources to shell Israeli settlements 
along the Israeli-Lebanese border and to attack Israel's military 
surrogates in southern Lebanon. Hizballah was also implicated 
in two bombings in Buenos Aires, of the Israeli embassy in 1992 
and of a Jewish cultural center in 1995, in which a total of more 
than 100 persons were killed. Palestinian Islamic Jihad, another 



71 



Iran: A Country Study 



Iran-supported group, was implicated in bombings in Tel Aviv 
in 1995 and Jerusalem in 1996 that took many Israeli lives. In 
the early 1990s, Iran moved with alacrity to support the new 
"Islamic" government in Sudan, although that move damaged 
Iran's fragile relations with Egypt. 

These linkages in Iran's foreign policy, Iran's attempt to 
secure medium-range and long-range missile capabilities, and 
suspicions that Iran was seeking nuclear weapons exacerbated 
the already problematic United States-Iran relationship. The 
United States maintained extensive sanctions against Iran and 
pressured its allies to limit economic cooperation with the 
Islamic Republic. U.S. pressure played a large role in the Ger- 
man decision at the end of the Iran-Iraq War not to resume 
work on an Iranian nuclear power plant at Bushehr and in lim- 
iting World Bank loans to Iran, investment by international 
firms in Iran's oil and gas industry, and the transfer to Iran of 
dual-use nuclear technology. 

For its part, Iran chafed at the sanctions, the large U.S. mili- 
tary presence in the Persian Gulf, and the "terrorist" label 
applied by the United States. Although Iran's military had been 
ravaged by eight years of war with Iraq and insecurity was 
endemic along the Iran-Iraq border, Iran continued to be 
denied Western weapons, even as Saudi Arabia, Kuwait, and 
other Persian Gulf states were heavily rearming. In 1995, how- 
ever, Iran offered an American company, Conoco, a major con- 
tract to develop the offshore Pars gas field. This overture 
probably represented an attempt by Iran to uncouple U.S.-Ira- 
nian economic relations from the other issues between the two 
countries. The strategy did not work. President William J. Clin- 
ton responded by banning American companies from doing 
business in Iran. In 1996 the United States Congress passed the 
Iran-Libya Sanctions Act (ILSA), which imposed sanctions on 
foreign companies investing more than US$40 million (later 
reduced to US$20 million) in Iran's oil and gas sector. How- 
ever, objections by the European Union (EU) prevented strict 
enforcement of ILSA-mandated sanctions. 

The radical element in Iran's foreign policy served several 
purposes. Khamenei believed that uncompromising hostility to 
Israel and the United States enhanced his standing with impor- 
tant constituencies at home and with Islamic constituencies 
abroad. Opposition to Israel, for example, identified Iran with 
the Palestinian masses and the Palestinian diaspora and distin- 
guished the Islamic Republic from the supposedly pliant Arab 



72 



Historical Setting 



states that had acquiesced in a United States-sponsored pro- 
Israeli peace plan. Support for Hizballah or Palestinian Islamic 
Jihad, not very costly in financial terms, enhanced Iran's weight 
and role in the region. By playing the role of spoiler in the 
Arab-Israeli peace process, Iran sought leverage against the 
United States and Israel. Such policies also satisfied the aspira- 
tions of the radical faction within the ruling group. Khomeini's 
fatwa sanctioning the killing of Salman Rushdie, for example, 
was a serious obstacle to improved relations with the EU coun- 
tries. However, Rafsanjani's attempts to explain away the 
decree were repeatedly undermined by hard-line elements at 
home. 

Before his death in 1989, Khomeini already had given his 
approval for a five-year economic development plan (see Glos- 
sary) that pointed to a more market-oriented economic pro- 
gram. The plan provided for a larger share in the economy for 
the domestic and foreign private sectors and allowed the gov- 
ernment to borrow up to US$27 billion abroad for develop- 
ment projects — both controversial measures. Together with the 
technocrats he appointed to head key economic organizations 
such as the central bank, the Planning and Budget Organiza- 
tion, and the Ministry of Finance, President Rafsanjani began 
to move Iran away from a state-controlled war economy. In 
1991 the government reduced the multiple exchange rates for 
the rial (for value of the rial — see Glossary) from seven to three 
and in 1993 declared full convertibility. Controls on imports, 
foreign currency, and prices were eased; state subsidies for 
essential goods were reduced; and prices for utilities and fuel 
were raised. 

New regulations permitted foreign investors equity participa- 
tion of up to 49 percent in joint ventures. Free-trade zones 
were established on the islands of Qeshm and Kish in the Per- 
sian Gulf. Several hundred government factories were slated 
for privatization. The government promised to reduce its own 
role in the economy — as much as 97 percent of all investments 
were being made by the public sector — although the five-year 
plan foresaw ambitious government investments in petrochem- 
icals, gas, steel, and other industries. Real gross domestic prod- 
uct (GDP — see Glossary) grew by more than 10 percent per 
year in the early 1990s. 

However, the liberalization program soon ran into difficul- 
ties. Privatization stalled in the face of resistance from the 
Foundation of the Disinherited, the parastatal organization 



73 



Iran: A Country Study 



that controlled hundreds of nationalized and expropriated 
enterprises, and because of fear that privatization would lead to 
economic dislocation. Inefficient, overstaffed state enterprises 
could not be sold off until they were made profitable. Govern- 
ment efforts to persuade expatriate Iranian businessmen to 
return and invest in Iran were unsuccessful. The easing of 
import and currency restrictions led to a doubling of imports, 
which depleted foreign-exchange reserves and saddled the 
country with short-and medium-term foreign debts of nearly 
US$30 billion. 

Severe retrenchment followed. Unable to meet its repay- 
ment obligations, the government had to reschedule about 
US$12 billion of debt, primarily with Germany, other European 
states, and Japan. At the same time, the open-market value of 
the rial dropped nearly 60 percent. Credit to the private sector 
was restricted. Imports were cut sharply, forcing many factories 
to operate at 50 percent of capacity because of scarcities of 
spare parts and raw materials. Continued deficit spending con- 
tributed to severe inflation. The start of the second five-year 
development plan was postponed for a year. The government 
re-imposed multiple exchange rates and import-export con- 
trols and threatened measures to control consumer prices. 

In 1992 economic hardship led to severe riots in the cities of 
Mashad, Arak, and Shiraz and to angry protests over inade- 
quate municipal services and higher bus fares in two working- 
class districts near Tehran in 1995. The government responded 
by strengthening the paramilitary forces and the secret police 
apparatus, while the Majlis approved a new security law that 
provided for lengthy prison sentences for even the most ordi- 
nary political activities deemed threatening to the stability of 
the state. 

Despite economic crises and heightened political repres- 
sion, the early years of the Rafsanjani presidency witnessed an 
easing of some social and cultural controls. Restrictions on 
women's dress and public intermixing between young men and 
women were relaxed. Rafsanjani's first minister of culture, 
Mohammad Khatami, pursued less restrictive policies toward 
the arts, theater, and book publishing. A number of intellectual 
and literary journals, such as Kiyan, Goftegu, Gardun, Iran-e 
Farda, and Kelk, were allowed to publish. These journals carried 
on a lively discussion on issues of civil society, the relationship 
between religion and state, and the role of clerics in govern- 
ment. Kiyan published the essays of the thinker and philoso- 



74 



Historical Setting 



pher Abdol Karim Soroush, who implicitly challenged the 
clerical monopoly on political power by arguing for an Islam 
that is pluralistic, tolerant, open to reinterpretation, and com- 
patible with democracy. The newspaper Salaam, published by a 
clerical insider, was allowed to criticize the government from a 
leftist perspective. 

The extent of this opening was limited, however, and did not 
extend to the political sphere. Factionalism among elite groups 
created some space for political competition within the ruling 
clerical establishment, but opposition political groups and 
newspapers were suppressed. Even the centrist IFM, which pro- 
claimed loyalty to the Islamic Republic, was barely tolerated. 
Elections continued to be closely controlled. The judiciary 
remained an instrument of state policy. The role of the security 
agencies was pervasive and menacing. 

The majority of the ruling clerics were grouped around two 
organizations, the Combatant Clerics Association and the Mili- 
tant Clerics Association. The Combatant Clerics represented 
the right wing and the Militant Clerics the left wing of the cleri- 
cal establishment. The conservatives used a kind of electoral 
gerrymandering to exclude the left wing from the Assembly of 
Experts in elections held in 1990 and from the Majlis in elec- 
tions held in 1992. (The Militant Clerics reemerged to play a 
role in the 1997 presidential election, however.) 

Although he assisted or acquiesced in these efforts to neu- 
tralize the radicals on the left, Rafsanjani proved unable or 
unwilling to stand up to conservatives on the right or to the 
security agencies, which grew increasingly assertive during his 
second presidential term (1993-97). The conservative majority 
in the Majlis forced the resignation of Rafsanjani's minister of 
culture and the head of national broadcasting on grounds of 
excessively liberal policies. In his role as Leader, Khamenei 
spearheaded a campaign against the Western "cultural 
onslaught," encouraging a crackdown on the press and the 
arts. The morals police reemerged in force to harass women 
and the young. Several newspapers were shut down. With cleri- 
cal encouragement, attacks occurred in 1995-96 against the 
offices of the publisher of a novel considered hostile to Islam, 
cinemas, and a bookstore. Women cyclists in a Tehran park 
were beaten. Officially sanctioned, club-wielding thugs broke 
up public gatherings of which the government did not 
approve. In November 1994, the prominent writer Ali Akbar 
Saidi Sirjani died while in police custody. In 1996 Ahmad Mir 



75 



Iran: A Country Study 



Alai, a writer and translator, was found dead on a street in his 
hometown, Esfahan. The essayist and translator Ghaffar 
Hosseini was found dead in his apartment in November 1996. 
The writer Farhad Sarkuhi was arrested repeatedly and badly 
tortured in 1996. Many observers suspected the complicity of 
the intelligence agencies in these acts of violence against intel- 
lectuals. Rafsanjani did nothing to investigate them, nor did he 
forthrightly condemn them. 

Iran was also implicated in the assassination of Iranian dissi- 
dents abroad. Iranian opposition figures were killed in Paris, 
Berlin, Vienna, Istanbul, Geneva, and elsewhere. Among them 
were former prime minister Bakhtiar (in Paris); the leader of 
the Kurdistan Democratic Party, Abdol Rahman Qasemlu (in 
Vienna); and Qasemlu's successor, Sadeq Sharifkandi (in Ber- 
lin). German authorities eventually charged Iran's minister of 
intelligence (state security) and implicated Iran's highest offi- 
cials in Sharifkandi 's murder. 

By the end of Rafsanjani 's second term, the Majlis and — with 
rare exceptions — the press were quiescent. Political life, 
defined in terms of genuine competition and debate over ideas 
and policies, was virtually nonexistent, even within the ruling 
group. Rafsanjani's close association with Khamenei, his 
insider status, and the extensive business interests of his family 
meant that he would not risk an open split with the conserva- 
tive faction. In his second term, Rafsanjani's centrist policies 
were in retreat, and the conservatives once again were in the 
ascendant. 

Khatami and the Reform Movement 

In 1996-97 two events sparked the second major attempt in 
the post-Khomeini decade to set the Revolution on a different 
course. First, on the eve of the 1996 Majlis elections, a small 
group of ministers and high-ranking officials closely associated 
with Rafsanjani broke away from the Combatant Clerics (with 
Rafsanjani's blessing) to form a new association, the Executives 
of Construction. They contested the elections on a separate 
slate, stressing their commitment to efficient management and 
to the industrial and entrepreneurial sector rather than to the 
bazaar, and won nearly 30 percent of the 270 Majlis seats. Thus, 
the elections unexpectedly led to a significant split within the 
dominant conservative clerical camp; indicated substantial 
public support for centrist, pragmatic politics; and made possi- 



76 



Historical Setting 



ble a debate on policy alternatives within the ruling establish- 
ment. 

The second event was the surprise election of Mohammad 
Khatami to the presidency in 1997. Khatami, Rafsanjani's one- 
time minister of culture, was running against the Majlis 
speaker, Ali Akbar Nateq Nuri, who was the candidate of the 
Combatant Clerics. Nuri had been endorsed by the principal 
clerical organizations and personalities, by commanders of the 
Revolutionary Guards, and, implicitly, by Khamenei. Nuri was 
widely expected to win. But Khamenei and the ruling clerics 
desired a large turnout. Khamenei prevailed upon the left-lean- 
ing Militant Clerics, who had withdrawn in a huff from active 
politics after their exclusion from the 1992 Majlis elections, to 
contest the election. 

The Militant Clerics named Khatami as their candidate, and 
he galvanized voters by running on a platform that emphasized 
the rule of law, expanded freedoms for Iranians, the need for a 
society-wide dialogue on problems of national concern, the 
idea of civil society, and dialogue rather than confrontation 
with the West. Khatami was further assisted by effective organi- 
zation. The mayor of Tehran, Hussein Karbaschi, a Rafsanjani 
protege, contributed the support of his widely read newspaper 
Hamshsahri and the considerable resources of the Tehran 
municipality. The Executives of Construction, who endorsed 
Khatami, proved effective organizers. The press, taking advan- 
tage of a small political opening, provided a forum for debate 
and discussion among competing political groups. Nearly 80 
percent of eligible voters cast ballots; Khatami secured nearly 
70 percent of the vote. Khatami's election reflected the wide- 
spread desire for change and helped launch a movement for 
wide-ranging reform and the expansion of civil society. 

* * * 



The Cambridge History of Iran (seven volumes) provides 
learned and factual essays by specialists on history, literature, 
the sciences, and the arts for various periods of Iranian history 
from the earliest times to the end of the Pahlavi period. Gene 
Garthwaite's The Persians is a handy one-volume survey of Ira- 
nian history from the Achaemenians to the present. 

For the history of ancient Iran and the period from the 
Achaemenians until the Islamic conquest, Roman Ghirshman's 



77 



Iran: A Country Study 

Iran: From the Earliest Times to the Islamic Conquest and A. T. Olm- 
stead's History of the Persian Empire, although somewhat dated, 
continue to be standard works. More recent books on the 
period are Richard Frye's The Heritage of Persia and its compan- 
ion volume, The Golden Age of Persia. For the early Islamic 
period, few books are devoted specifically to Iran, and readers 
therefore must consult general works on early Islamic history. 
Recommended studies are Marshall G. S. Hodgson's three-vol- 
ume work The Venture of Islam and Ira Lapidus's A History of 
Islamic Societies. Much useful information on the early as well as 
the later Islamic period can be culled from E. G. Browne's four- 
volume A Literary History of Persia. Ann K. S. Lambton's Landlord 
and Peasant in Persia is excellent for both administrative history 
and land administration up to the 1950s. 

For the period of Reza Shah, A History of Modern Iran by 
Joseph M. Upton is both concise and incisive. Iran and the Rise 
of Reza Shah by Cyrus Ghani is a rich political history of the 
background to Reza Shah's rise and early years in power, cover- 
ing the period up to 1925. Stephanie Cronin's The Army and the 
Creation of the Pahlavi State in Iran, 1910-1926 examines the 
army Reza Shah built and its role as he rose to power. Modern 
Iran by L. P. Elwell-Sutton, although written in the 1940s, is still 
a useful factual study, and Amin Banani's The Modernization of 
Iran, 1921-1941 offers similar coverage of that same period. 

For the period of Mohammad Reza Shah's rule, Iran: The Pol- 
itics of Groups, Classes, and Modernization by James A. Bill and The 
Political Elite of Iran by Marvin Zonis are studies of elite politics 
and elite structure. Fred Halliday's Iran: Dictatorship and Develop- 
ment is a critical account of the nature of the state and the 
shah's rule; Robert Graham's Iran: The Illusion of Power covers 
the last years of the shah's reign. A more sympathetic assess- 
ment can be found in George Lenczowski's Iran under the Pah- 
lavis. Relations between the state and the religious establish- 
ment for the whole of the Pahlavi period are covered in Shahr- 
ough Akhavi's Religion and Politics in Contemporary Iran. Iran's 
foreign policy is surveyed in Ruhollah Ramazani's Iran's Foreign 
Policy, 1941-1973. The U.S. -Iranian relationship in the period 
1941-80 is the focus of James Bill's The Eagle and the Lion: The 
Tragedy of American-Iranian Relations and of Barry Rubin's Paved 
with Good Intentions: The American Experience and Iran. 

Books that examine the roots and causes of the Islamic Revo- 
lution of 1978-79 include Jahangir Amuzegar, The Dynamics of 
the Iranian Revolution', Misagh Parsa, Social Origins of the Iranian 



78 



Historical Setting 



Revolution', and Hossein Bashiriyeh, The State and Revolution in 
Iran, 1962-1982. The U.S.-Iranian relationship in the period 
preceding and immediately following the Islamic Revolution is 
covered in Gary Sick's All Fall Down: America's Tragic Encounter 
with Iran. The foreign policy of the Islamic Republic is covered 
in Ramazani's Revolutionary Iran: Challenge and Response in the 
Middle East. Shaul Bakhash's Reign of the Ayatollahs: Iran and the 
Islamic Revolution, in its second edition, is a political history of 
the Islamic Revolution up to 1990. In Who Rules Iran: The Struc- 
ture of Power in the Islamic Republic, Wilfried Buchta looks at the 
institutional and personal power structures in the Islamic 
Republic. Bahman Bakhtiari's Parliamentary Politics in Revolu- 
tionary Iran covers the period up to 1994. Daniel Brumberg's 
Reinventing Khomeini: The Struggle for Reform in Iran is a rich 
interpretive essay on the conflicting ideas and ideologies that 
have fueled the Islamic Revolution. The economy in the post- 
revolution period is addressed in Jahangir Amuzegar's factual 
and analytical The Iranian Economy under the Islamic Republic. 
The Iran-Iraq War is covered in Dilip Hiro's The Longest War: 
The Iran-Iraq Military Conflict and in Shahram Chubin and 
Charles Tripp, Iran and Iraq at War. (For further information 
and complete citations, see Bibliography.) 



79 



Chapter 2. The Society and Its Environment 




A fifth-century B. C. drinking vessel in the shape of a winged lion, from 
Hamadan 



THE CREATION OF THE ISLAMIC REPUBLIC of Iran in 
1979 resulted in the destruction of the power and influence of 
the predominantly secular and Western-oriented political elite 
that had ruled Iran since the early part of the twentieth century. 
The new political elite that replaced this group was composed 
of Shia (see Glossary) Muslim clergymen and lay technocrats of 
middle-class and lower-class origins. The programs that they 
implemented have had cultural consequences, specifically in 
the promotion of religious ideals and values in public life. The 
general trend of social changes since 1979 has been for lower- 
income groups to benefit considerably from broader access to 
educational facilities, health services, and welfare programs. 
However, large discrepancies in household income between the 
richest and poorest strata of the population have not been elim- 
inated. Government investments in social programs have 
helped to stimulate a major rural-to-urban migration, which 
has led to a shift in the distribution of the population, from 
about 65 percent rural in 1976 to 68 percent urban by 2006. 

From the outset, establishing an "ideal" religious society was 
a professed aim of the Islamic Republic. However, pursuit of 
this goal was impeded by the eight-year war with Iraq (1980- 
88), a conflict that, at least in its initial years, threatened the 
existence of both the regime and the country. Even during the 
war years, however, the government implemented several pro- 
grams to benefit the mostazafin (literally, the disinherited, 
meaning the poor; see Glossary) . For example, a nationwide lit- 
eracy program targeted both men and women over the age of 
15. A campaign to provide the country's villages with amenities 
comparable to those in the cities improved the rural road sys- 
tem and the delivery of electricity, piped water, and natural gas 
supplies to rural households. The government also invested 
amply in schools, public libraries, cultural centers, public 
parks, hospitals, and health clinics in both rural and urban 
areas. Although there was consensus among the revolutionary 
elite that the government should provide infrastructure for the 
mostazafin, there was also contention over the kinds of social 
welfare programs for which the government should assume 
responsibility. 

Every major cultural and social group in Iran has been 
affected by the changes resulting from the establishment of the 



83 



Iran: A Country Study 

Islamic Republic. One significant impact has been the govern- 
ment's ongoing effort to recast society according to religiously 
prescribed behavioral codes. The secularized, Western-edu- 
cated upper and middle classes of the prerevolutionary period 
resent laws that impose standards of social behavior they dis- 
dained when they had elite status. In particular, they dislike 
hejab (see Glossary) , a code that regulates strictly how women 
may dress, and the prohibition on the production and distribu- 
tion of alcoholic beverages. Both the religious middle class, 
generally identified with the merchants and artisans of the 
bazaar (see Glossary), and the lower classes tend to support 
these laws because they reinforce the values of their generally 
conservative lifestyles. In turn, the clergy and lay political lead- 
ers have targeted secular groups for their "immoral" lifestyles. 

Geography 

Iran is one of the world's most mountainous countries, and 
its topography has helped to shape the political, economic, and 
social history of the country. The mountains enclose several 
broad elevated basins, or plateaus, on which major agricultural 
and urban settlements are located. Until the twentieth century, 
when major highways and railroads were constructed through 
the mountains to connect the population centers, these basins 
tended to be relatively isolated from one another. Historically, 
transportation was by means of caravans that followed routes 
traversing gaps and passes in the mountains. The mountains 
also impeded easy access to the Persian Gulf and the Caspian 
Sea. 

Located in southwestern Asia between the Caspian Sea and 
the Persian Gulf, Iran has an area of 1,648,000 square kilome- 
ters, about one-fifth that of the continental United States. Iran 
is the seventeenth largest country in the world. It shares land 
borders with seven countries and marine boundaries with nine 
countries. To the north are Armenia, the Republic of Azer- 
baijan, and Turkmenistan; on the west are Turkey and Iraq; on 
the east are Afghanistan and Pakistan. Some 1,700 kilometers 
long, Iran's southern border consists entirely of the northern 
shorelines of the Persian Gulf and Gulf of Oman. Iran shares 
marine boundaries in the Persian Gulf with Bahrain, Kuwait, 
Qatar, Saudi Arabia, and the United Arab Emirates; its sea 
boundary in the Gulf of Oman is with the sultanate of Oman 
and the United Arab Emirates. Iran also has a 740-kilometer 



84 



The Society and Its Environment 



coast along the Caspian Sea, whose waters it shares with the 
Republic of Azerbaijan, Kazakhstan, Russia, and Turkmenistan. 

Topography 

The topography of Iran consists of rugged mountains sur- 
rounding high interior basins. The main mountain chain is the 
Zagros Mountains, a series of parallel ridges interspersed with 
plains that bisect the country from northwest to southeast. 
Many peaks in the Zagros exceed 3,000 meters above sea level, 
and at least five peaks in the south-central region of the coun- 
try are higher than 4,000 meters. As the Zagros chain continues 
into southeastern Iran, the average elevation declines dramati- 
cally, to less than 1,500 meters. A narrow but high range, the 
Alborz Mountains, rims the Caspian Sea littoral. Volcanic 
Mount Damavand (5,600 meters), located in the center of the 
Alborz, is the country's highest peak, and the highest mountain 
on the Eurasian landmass west of the Hindu Kush range (see 
fig. 5). 

The center of Iran consists of several closed basins that col- 
lectively are referred to as the Central Plateau. The average ele- 
vation of this plateau is about 900 meters, but several of the 
mountains that tower over it exceed 3,000 meters. The eastern 
part of the plateau is covered by two deserts, the Dasht-e Kavir 
(Salt Desert) and the Dasht-e Lut (Desert of Emptiness) . 
Except for some scattered oases, these deserts are uninhabited. 

Iran has two notable expanses of lowlands: the Khuzestan 
Plain in the southwest and the Caspian Sea coastal plain in the 
north. The Khuzestan Plain is a flat, roughly triangular exten- 
sion of the Mesopotamia Plain averaging about 160 kilometers 
in width. It extends about 120 kilometers inland, then meets 
abruptly with the first foothills of the Zagros. Much of the 
Khuzestan Plain is covered with marshes. The Caspian coastal 
plain is both longer and narrower. It extends about 640 kilome- 
ters along the Caspian shore, but its greatest width is less than 
50 kilometers. South of Khuzestan, there are extensive 
stretches of the Persian Gulf and Gulf of Oman coasts where 
the Zagros Mountains meet the shore. There are fairly broad 
coastal lowlands to the east and west of the city of Bushehr and 
along the Strait of Hormuz, but annual precipitation in both 
regions is too low and unreliable to sustain the diverse agricul- 
ture that characterizes the Khuzestan Plain and the Caspian 
coastal plain. 



85 



Iran: A Country Study 




— - / 

" •« V * 

\ \ Klwk 

Island 





— International boundary 


® 


National capital 




River 




Spot Elevation 





50 100 150 Kilometers 





50 100 150 Miles 



SAUDI 4 , 8 ARABIA 




\ PAKISTAN 



U aTa1 D ( guff of Oman 

EMIRATES 



Figure 5. Physical Features 



Iran has no major rivers. The only navigable river is the 
Karun, which shallow-draft boats can negotiate from Khorram- 
shahr, where the Karun joins the Shatt al Arab (Arvand Rud in 
Persian; see Glossary), north to Ahvaz for about 180 kilometers. 
The Karun and several other permanent rivers and streams, 
such as the Dez and the Karkheh, originate in the southwestern 
Zagros Mountains. However, with the notable exception of the 
Karun and its main tributary the Dez, few of these watercourses 
reach the Persian Gulf. The Karkheh, for example, is a major 
feeder for the marshes that straddle the Iran-Iraq border. Far- 
ther north, most rivers drain into interior basins that form shal- 
low salt lakes in the winter and spring but are dry beds in the 
summer months. Of the major permanent saltwater bodies, the 
largest is Lake Urmia (also cited as Orumiyeh or Urmiyeh) in 
the northwest, which is too briny to support fish or most other 
forms of aquatic life. Several connected salt lakes also exist 
along the Iran-Afghanistan border. 



86 



The Society and Its Environment 



Climate 

Iran has a variable climate. In the northwest and west, win- 
ters are cold, with heavy snowfall and subfreezing temperatures 
from December to February. Spring and fall are relatively mild, 
with rain in the early spring and late autumn. Summers are dry; 
days can be hot, but nights are mild to cool. In Tehran and the 
central part of the country, winters are less severe and summers 
warmer than in the west. Along the Caspian coastal plain, win- 
ters generally are mild, with rare frosts; summers are warm and 
humid. In the south, winters are mild and the summers very 
hot, with average daily temperatures in July exceeding 40° C 
along the Persian Gulf coast. On the Khuzestan Plain, summer 
heat is accompanied by high humidity. 

In general, Iran's climate is arid; most of the relatively scant 
annual precipitation falls from October through April. In most 
of the country, yearly precipitation averages 250 millimeters or 
less. Some basins of the Central Plateau receive 100 millimeters 
or less. These dry conditions mean that agriculture in most 
areas of Iran must depend on irrigation. 

Two regions enjoy relatively generous amounts of precipita- 
tion: the higher mountain valleys of the Zagros and the Cas- 
pian coastal plain. In both, precipitation averages at least 500 
millimeters annually. In the western part of the Caspian coastal 
plain, rainfall exceeds 1,300 millimeters annually and is distrib- 
uted relatively evenly throughout the year. 

Environment 

Iran's mountains are in an active earthquake zone, and sev- 
eral low-magnitude quakes that cause little destruction and few 
or no casualties occur annually. More powerful earthquakes, 
exceeding six on the open-ended Richter scale, also are fre- 
quent. A December 2003 earthquake centered under the city 
of Bam in the southeastern Zagros Mountains destroyed more 
than 12,000 homes and buildings and caused the deaths of 
26,000 people. A 1990 earthquake in the western Alborz Moun- 
tains caused 40,000 deaths. 

Various human activities have had adverse effects on the 
environment. Excessive use of fertilizers and pesticides in agri- 
culture, for example, has contributed to soil degradation in 
many rural areas, while the drilling of deep wells has lowered 
water tables and caused some pastures to dry up. Industrializa- 
tion and urbanization, ongoing since the 1960s, have caused 



87 



Iran: A Country Study 



pollution of the water even as they have introduced competing 
demands for this scarce resource. Although environmental 
nongovernmental organizations (NGOs) and some political 
leaders have been advocating water conservation policies since 
at least the early 1990s, an effective national water consump- 
tion plan has not been developed. 

The Environmental Protection Organization (EPO), which 
is headed by a vice president and thus has de facto cabinet 
rank, is the main governmental body that monitors and works 
to control atmospheric pollution. Since the early 1990s, it has 
cited air pollution, especially in Tehran, as the country's major 
environmental problem. According to the EPO, 94 percent of 
all urban air pollution is attributable to auto vehicle emissions. 
Air pollution generally is most severe in winter because low- 
pressure air masses — composed of dirty air — remain sus- 
pended for several days over the high-altitude basins in which 
are located major cities such as Esfahan, Mashhad, Shiraz, 
Tabriz, and Tehran. The EPO issues health alerts whenever its 
professional monitors deem the measured level of toxic pollut- 
ants in the air sufficiently high to pose a hazard if inhaled by 
vulnerable populations, including all children under age 14. 
The city of Tehran annually closes all public schools several 
days at a time each winter in response to these EPO alerts. 

The EPO also monitors water pollution from both house- 
hold and industrial waste. In certain areas, the illegal dumping 
of toxic wastes into water sources has made the affected water 
unfit for consumption and even killed aquatic life. The EPO 
has been moderately effective in prompting municipalities and 
private enterprises along the densely populated Caspian coast 
to limit the dumping of wastes into streams that empty into the 
Caspian Sea, where pollution has become a threat to undersea 
spawning areas for many fish species and has fouled nesting 
sites of migratory birds and the habitat of the endangered Cas- 
pian seal. Other major environmental problems are deforesta- 
tion and the overgrazing and desertification of agricultural 
land. 

Population 

According to preliminary data from the October-November 
2006 decennial census, Iran's total population was 70,049,262. 
This figure represents a 16.6 percent increase over the total 
population of 60,055,488 enumerated in the previous national 
census conducted in October 1996 or an average of 1.66 per- 



88 



The Society and Its Environment 



cent per year. Iran's population growth rate has been declining 
steadily since 1986, when it was at a twentieth-century high of 
3.2 percent per annum. Because of a very active birth-control 
program promoted by the Ministry of Health since 1988, the 
growth rate had declined to 1.1 percent in 2006. The fertility 
rate dropped from about 7.0 to 1.7 children born per woman 
between 1979 and 2007. In 2007 the birthrate was 16.6 per 
1,000 population, and the death rate was 5.6 per 1,000 popula- 
tion. Also in 2007, an estimated 23.2 percent of the population 
was 14 years of age or younger, 5.4 percent was 65 and older, 
and 71.4 percent was 15 to 64. In 2006 those percentages were 
26.1, 4.9, and 69.0, respectively (see fig. 6). Males constituted 
50.9 percent of the population and females 49.1 percent in the 
2006 census. 

According to the 2006 census, Iran has an average popula- 
tion density of 42 persons per square kilometer. However, in 
the provinces of East Azerbaijan in the northwest, Gilan and 
Mazandaran along the Caspian coast, and Tehran, the popula- 
tion density is significantly greater. Much of eastern Iran is 
more sparsely populated, with some areas having fewer than 10 
persons per square kilometer. 

Also according to the 2006 census, 68.4 percent of the popu- 
lation was living in urban areas, defined as incorporated places 
with a minimum population of 5,000. Tehran, the capital and 
largest city, had a total population of 7,160,094 in 2006, while 
six other cities — Mashhad, Esfahan, Tabriz, Karaj, Shiraz, and 
Qom — had populations in excess of 1 million (see table 2, 
Appendix). As of 1996, an additional 48 cities each had a popu- 
lation of more than 100,000 (see table 3, Appendix). The most 
populous province is Tehran, with a population of 13,328,011 
according to preliminary 2006 census data. The least populous 
province is Ham, with 543,729 inhabitants in 2006. 

Emigration 

During and immediately following the Iranian Revolution of 
1978-79, an estimated 200,000 to 300,000 Iranians voluntarily 
left the country to resettle abroad, primarily in the United 
Kingdom, France, Germany, and the United States. Most emi- 
grants were from the wealthiest families, who collectively took 
with them an estimated US$30 billion. During the conflict 
between the government and armed opposition groups in the 
early 1980s, several thousand Iranians fled the country clandes- 
tinely and obtained refugee status in various European Union 



89 



Iran: A Country Study 



AGE-GROUP 




1 2 3 4 5 



POPULATION IN MILLIONS 



Source: Based on information from U.S. Census Bureau, International Data Base, 
Population Pyramids," www.census.gov/ipc/www/idbp)T.html. 



IDB 



Figure 6. Population Distribution by Age and Sex, 2006 



(EU) countries, Australia, Canada, and the United States. 
Since the early 1990s, several hundred to several thousand Ira- 
nians, most with a college education, have emigrated annually. 
The largest community outside Iran lives in the United States, 
where 338,266 people claimed Iranian ancestry (i.e., were born 
in Iran or in the United States of Iran-born parents) in the 
2000 census; half of this number resided in California. An esti- 
mated 300,000 more Iranians were living in Canada, the coun- 
tries of the EU, and Turkey. 



Refugees 

During the 1980s, an estimated 2.5 million Afghans fled to 
Iran as refugees from the civil war between the Soviet-backed 
Afghan government and Afghan anti-Soviet militia groups 



90 



The Society and Its Environment 



known collectively as the mujahedin. In addition, 300,000 Ira- 
qis, primarily Shia Muslims, were registered as refugees in Iran; 
two-thirds of these refugees were Iraqis who were descendants 
of Iranian clergy and pilgrims who had settled in Iraq but 
whom the government of Saddam Hussein forcibly expelled 
during 1979-80. In March 1991, an estimated 1.8 million Iraqis 
fled to Iran following the Iraqi government's suppression of 
uprisings among the Iraqi Shias (who were Arabs) and Kurds. 
The International Committee of the Red Cross and Red Cres- 
cent Societies began repatriating Afghan and Iraqi Kurdish ref- 
ugees from Iran in 1992. Nonetheless, the 1996 census 
identified 1.4 million Afghans and 400,000 Iraqis, primarily 
Arab Shias, living in Iran. Since the late 1990s, many Afghans 
have resisted repatriation, migrating from refugee camps in 
eastern Iran to large cities to find work and avoid detection by 
the authorities. During 2003 and 2004, an estimated 250,000 
Iraqi refugees returned independently to Iraq. 

Languages and Peoples 

Iran has a heterogeneous population speaking a variety of 
Indo-Iranian, Semitic, and Turkic languages (see fig. 7; table 4, 
Appendix) . The largest language group consists of speakers of 
Indo-Iranian languages, who in 1996 made up more than 75 
percent of the population. Speakers of Indo-Iranian languages 
include speakers of Persian, the official language of the coun- 
try, and its various dialects; speakers of a set of related dialects, 
called Kirmanji, spoken by the Kurds of western Iran; speakers 
of Luri, the language of the Bakhtiaris and Lurs, who live in the 
central Zagros; and Baluchi (also seen as Balochi), the lan- 
guage of the semitribal people of the same name who live in 
southeastern Iran (see Baluchis, this ch.). Approximately 20 
percent of the population speaks various dialects of Turkish. 
Speakers of Semitic languages include Arabs and Assyrians. 

The Persian Language and People 

The official language of Iran is Persian (the Persian term for 
which is Farsi). It is the language of government and public 
instruction and is the native tongue of at least 65 percent of the 
population. A large proportion of the other 35 percent speak 
Persian as a second language. Many different dialects of Per- 
sian are spoken in various parts of the Central Plateau, and 
people from each city usually can be identified by their speech. 



91 



Iran: A Country Study 



^Tabriz 

Lafcg Urmia 





National capital 


• 


City 


1 — 1 


Azarbaijani 


i : j 


Kurd 




Baluch 


I-: ■ 


Lur 




Qashqai 


1 1 


Arab 




Turkoman 


an 


Persian 


Shaded areas indicate regions 


where ethnic groups constitute 


a majority or significant minority 


of the population. 



Mashhad 



Tehran 



Esfahan 



Yazd 



Kerman 



Zahedani 

J 



,Bandar-e Abbas 1 



100 200 300 Kilometers 

100 200 300 Miles 



Figure 7. Major Ethnic Groups 



Some dialects, such as Gilaki and Mazandarani, spoken along 
the Caspian coastal plain, are distinct enough to be virtually 
unintelligible to a Persian speaker from Tehran or Shiraz. 

As part of the Indo-European family of languages, Persian is 
distantly related to Latin, Greek, the Slavic and Teutonic lan- 
guages, and English. Persian is an ancient language that has 
developed through three historical stages: Old Persian, ca. 500 
B.C. to ca. A.D. 250, was written in cuneiform and used exclu- 
sively for royal proclamations and announcements; Middle Per- 
sian, or Pahlavi, was in use from ca. 250 to ca. 900 and written 
in an ideographic script; modern Persian is written in a modi- 
fied Arabic script. Modern Persian has a well-established liter- 
ary tradition, especially in poetry, from as early as the 
thirteenth century. Persian speakers regard their language as 



92 



The Society and Its Environment 



exceptionally beautiful, and they take great pleasure in listen- 
ing to the verses of medieval poets such as Ferdowsi, Hafez, 
Rumi, and Sadi, as well as to contemporary poetry. The lan- 
guage is a living link with the past, and historically it has been 
important in binding the nation together. 

The Persians are the largest ethnic group in Iran. They pre- 
dominate in the major urban areas of central and eastern 
Iran — in the cities of Tehran, Esfahan, Mashhad, Shiraz, Arak, 
Kashan, Kerman, Qom, and Yazd; in the villages of the Central 
Plateau; and along the Caspian coast. Persians generally take 
great pride in their art and music, both of which have uninter- 
rupted historical roots almost as old as Persian literature. The 
vast majority of Persians are Shia Muslims (see Shia Islam in 
Iran, this ch.). Since at least the beginning of the nineteenth 
century, Persians have dominated the higher ranks of the Shia 
clergy and have provided important clerical revolutionary lead- 
ers such as Ayatollah Sayyid Ruhollah Musavi Khomeini and 
former presidents Ali Akbar Hashemi Rafsanjani and Moham- 
mad Khatami. Fewer than 3 percent of Persians adhere to 
other faiths. These include a community of Sunni (see Glos- 
sary) Muslim Persians in the Lar region of Fars Province, 
Baha'is, Jews, and members of the pre-Islamic Zoroastrian faith 
(see Sunni Muslims; Non-Muslim Minorities, this ch.). 

Other Indo-lranian-Speaking Groups 

Kurds 

In the early 2000s, an estimated 4.3 to 4.6 million Kurds lived 
in Iran, accounting for about 7 percent of the total population. 
They are the third-largest ethnic group in the country, after the 
Persians and Azerbaijanis (see Turkic-speaking Groups, this 
ch.). The Kurds are concentrated in the Zagros Mountains 
along the western frontiers with Turkey and Iraq, adjacent to 
the Kurdish populations of both those countries. The Kurdish 
area of Iran includes the southern counties of West Azarbaijan 
Province and all of Kurdistan and Kermanshah provinces. 
There are also Kurdish villages in Hamadan, Ham, and 
Luristan provinces and a predominantly Kurdish area in North 
Khorasan Province. 

Historically, Iran's Kurdish population has been both rural 
and urban. As late as the 1930s, some 80 percent of the Kurds 
lived in rural settings, and at one time as many as half of rural 
Kurds were nomads. Since the late 1950s, however, the Kurdish 



93 



Iran: A Country Study 



population has been increasingly urbanized. According to the 
1996 census, more than 50 percent of the population in the 
Kurdish provinces of Kermanshah and Kurdistan was urban 
and less than 2 percent was nomadic. Kermanshah (formerly 
Bakhtaran) historically has been the largest Kurdish city. 

During the twentieth century, the gradual urbanization and 
education of Kurdish society aroused ethnic consciousness and 
a feeling of community with Kurds in other countries. The 
neighboring Iraqi Kurds' struggle for autonomy, which began 
in 1960, influenced the formation of two clandestine political 
parties, the Kurdistan Democratic Party (KDP) and the 
Komela. After supporting the Iranian Revolution of 1978-79, 
these parties, which, like the population of Kurdistan itself, 
were predominantly Sunni, undertook four years of ultimately 
unsuccessful regional guerrilla activity against the Islamic 
Republic in an effort to gain the autonomy that they had 
expected would result from the Revolution. The campaign 
found little support in the regions around Bakhtaran (now 
Kermanshah), where non-Sunni Kurds were integrated eco- 
nomically and politically with the rest of Iran. Since the guerril- 
las' suppression in 1984, the Sunni Kurd population has 
complained of discrimination by the central government in the 
distribution of development funds, the status of the Kurdish 
language, and access to employment and university admission. 

Although Sunni Islam is the predominant religion among 
the Kurds, significant numbers practice Shia Islam and a het- 
erodox version of Islam, Ahl-e Haqq (see Shia Islam in Iran, 
this ch.). Iran's Kurds also include small communities of Yazi- 
dis, another heterodox Islamic group, and Jews. 

The Kurds' closely related dialects, known collectively in 
Iran as Kirmanji, are divided into northern and southern 
groups. All contain numerous Persian loanwords. Persians have 
used the proximity of Kurdish to Persian as an argument 
against the use of Kurdish in schools in majority-Kurdish areas. 
Because Persian has been the medium of instruction in schools 
for more than 50 years, educated Kurds tend to be bilingual. 

Lurs 

The Lurs are an ethnic group residing in the central and 
southern Zagros. They speak Luri, a language closely related to 
Persian and Kurdish. Like the Persians, the Lurs are predomi- 
nantly Shia Muslims, although a minority adhere to Ahl-e 
Haqq. Luri is not a written language, but it has a rich oral cul- 



94 



The Society and Its Environment 



ture of music and poetry. Since the 1980s, the lack of a literary 
tradition has contributed to a trend for Lur children, especially 
in urban areas, of using the Persian that they learn in school 
for everyday speech. A majority of the estimated 3.5 million 
Lurs live in Luristan Province, which in the early twentieth cen- 
tury was occupied by 60 distinct tribal groups. Tribal identities 
have weakened under the impact of steady urbanization. By 
1996, more than 60 percent of the province's population lived 
in cities. Khorramabad and Borujerd are Luristan 's main urban 
centers. 

Historically, the Bakhtiari were the most famous and power- 
ful of the Lur tribes. By the 1920s, their long and arduous 
nomadic treks had become the subject of Western travel lore 
and even cinema. The Bakhtiari tribal leaders, or khans, 
became involved in national politics and were considered part 
of the pre revolutionary elite. Detribalized Bakhtiaris, especially 
those who settled in urban areas, tend to become assimilated 
into Persian culture. Although small numbers of Bakhtiaris 
continue to practice nomadic livestock raising, by 2000 the 
overwhelming majority lived in towns and villages. The Bakh- 
tiari Lurs have their own province, Chahar Mahall va Bakhtiari, 
southeast of Luristan. 

Other Lurs live south of the Bakhtiari in Kohgiluyeh va 
Buyer Ahmadi Province and in Ham Province. Once consid- 
ered among the fiercest of Iranian tribes, the Lurs, like other 
nomadic tribes, were forcibly settled in the 1930s. After the 
Revolution, the Islamic Republic designated Ham Province and 
Kohgiluyeh va Buyer Ahmadi Province especially "deprived," or 
underdeveloped, and targeted them for special infrastructure 
development projects. 

Baluchis 

The Baluchis, who live predominantly in Sistan va Bal- 
uchistan Province, numbered approximately 800,000 in Iran in 
the early 2000s. They are part of a larger group that forms the 
majority of the population of Balochistan Province in Pakistan 
and of adjacent areas in southwestern Afghanistan. In Iran the 
Baluchis are concentrated in the Makran Highlands, an area 
that stretches eastward along the Gulf of Oman to the Pakistan 
border and includes some of the most barren landscape in 
Iran. The Baluchis speak an Indo-Iranian language distantly 
related to Persian and more closely related to Pashtu (Pashto). 
Baluchi is solely an oral language in Iran. The majority of Bal- 



95 



Iran: A Country Study 



uchis are Sunni rather than Shia Muslims. This religious differ- 
ence has been a persistent source of tension, especially in the 
provincial capital, Zahedan. 

About 10 percent of the Baluchis are seminomadic or 
nomadic; the remainder are settled farmers and town dwellers. 
Tribal organization remains intact among rural Baluchis. The 
Baluchis have been one of the most difficult tribal groups for 
the central government to control, in large part because of 
poor communications between Tehran and the province of Sis- 
tan va Baluchistan. Most of the principal Baluchi tribes live 
along the borders with Pakistan and Afghanistan. 

With the exception of the city of Zahedan, neither the mon- 
archy nor the Islamic republic has invested significant funds in 
local development projects. As a result, since the 1980s a major 
source of income for residents has been smuggling goods, 
especially illegal narcotics, into Iran from Afghanistan and 
Pakistan. In highland areas, limited agriculture is practiced 
where groundwater is sufficient for irrigation. In the late 1990s, 
a prolonged drought severely affected the entire province, 
prompting thousands of Baluchis to abandon their villages and 
resettle in Zahedan and elsewhere in Iran. 

Other Indo-Iranian Groups 

Scattered throughout central, southern, and eastern Iran are 
small groups, some nomadic or seminomadic, speaking many 
different Indo-Iranian languages. Some tribes in the provinces 
of North Khorasan, Razavi Khorasan, and South Khorasan are 
related to groups in neighboring Afghanistan and Turkmeni- 
stan. Also in those three provinces are an estimated 30,000 
Tajiks, settled farmers related to the Tajiks of Afghanistan and 
Tajikistan. Several smaller Indo-Iranian-speaking minorities 
exist in tribally organized settled groups: the Hazarah, Barbai, 
Teimuri, Jamshidi, and Afghani in the provinces of North, 
Razavi, and South Khorasan; the Qadikolahi and Pahlavi in 
Mazandaran Province; and the Agajani in the Talesh region of 
Gilan Province. 

Turkic-Speaking Groups 

Turkic speakers constitute about 20 percent of Iran's total 
population. They are concentrated in northwestern Iran, 
where they form the overwhelming majority of the population 
of Ardabil and East Azarbaijan provinces and a majority in West 
Azarbaijan and Zanjan provinces. They also constitute a signifi- 



96 



The Society and Its Environment 



cant minority in the provinces of Fars, Gilan, Hamadan, Mazan- 
daran, North Khorasan, Qazvin, Razavi Khorasan, South 
Korasan, and Tehran. Except for the Azerbaijanis, most Turkic- 
speaking groups are tribally organized. Some Turkic-speaking 
tribes continue to lead a nomadic or seminomadic life. Edu- 
cated Turkic speakers in the large cities also speak Persian. 

The Turkic languages belong to the Ural-Altaic family, which 
includes many languages of Central Asia and western China, as 
well as Turkish, Hungarian, and Finnish. The various Turkic 
languages spoken in Iran tend to be mutually intelligible. Of 
these, only Azerbaijani is written to any extent. In Iran it is writ- 
ten in the Arabic script, in contrast to the practice in the 
Republic of Azerbaijan, where a modified Latin alphabet is 
used. 

Azerbaijanis 

The Azerbaijanis account for 90 percent of all Turkic speak- 
ers in Iran. Most Azerbaijanis are concentrated in the north- 
western corner of the country, where they form the majority 
population in an area between the Caspian Sea and Lake 
Urmia and the segment of the northern border formed by the 
Aras River south to the latitude of Tehran. Their language, 
Azerbaijani (also called Azeri or Turkish), is structurally similar 
to the Turkish spoken in Turkey. More than 65 percent of all 
Azerbaijanis live in urban areas. Major Azerbaijani cities 
include Tabriz, Ardabil, Khoi, Maragheh, and Zanjan. In addi- 
tion, about 40 percent of the population of the region of 
Urmia in West Azarbaijan Province is Azerbaijani, as is one- 
third of Tehran's population. There are sizable Azerbaijani 
minorities in the major cities of northwestern Iran. The life- 
styles of urban Azerbaijanis do not differ from those of Per- 
sians, and there is considerable intermarriage within the upper 
and middle classes in cities with mixed populations. Similarly, 
customs among Azerbaijani villagers do not appear to differ 
markedly from those of Persian villagers. The majority of Azer- 
baijanis, like the majority of Persians, are Shia Muslims, 
although some Azerbaijanis are Ahl-e Haqq Muslims or non- 
Muslim Baha'is. 

Qashqais 

The Qashqais are the second-largest Turkic-speaking group 
in Iran. Numbering about 600,000, they are a confederation of 
several Turkic-speaking tribes in Fars Province in south-central 



97 



Iran: A Country Study 

Iran. Historically, the Qashqais were pastoral nomads who 
moved between summer pastures in the higher elevations of 
the Zagros Mountains north of Shiraz and winter pastures at 
low elevations south of Shiraz. Most Qashqais are Shia Muslims. 

The Qashqai confederation emerged in the eighteenth cen- 
tury, and during the nineteenth century it became one of the 
best-organized and most powerful tribal groups in Iran. Reza 
Shah Pahlavi (r. 1925-41) forcibly settled the Qashqais in the 
early 1930s, but, like the Bakhtiaris and other forcibly settled 
tribes, they returned to nomadic life upon Reza Shah's exile in 
1941. However, the reduction in numbers and disorganization 
they had suffered after their settlement kept the Qashqais from 
regaining their previous strength and independence. Since the 
mid-1960s, Qashqais have been settling in villages and towns. 
According to some estimates, up to 75 percent of all Qashqais 
had settled by the early 2000s. Both Qashqai and non-Qashqai 
Turkic speakers in Fars Province recognize a common ethnic 
identity in relation to non-Turks. All the Turkic-speaking 
groups of the region speak mutually intelligible dialects that 
are closely related to Azerbaijani. 

Other Turkic-Speaking Groups 

Many small Turkic-speaking groups are scattered throughout 
Iran, mainly in the northern tier of provinces. The largest of 
these are the Turkmens, divided into several tribes, some of 
which are sections of larger tribes living across the border in 
Turkmenistan. The Turkmens live to the northeast of the Cas- 
pian Sea, in a region of Golestan Province known as the Turk- 
men Sahra. Largely pastoral nomads before the 1930s, the 
Turkmens subsequently settled in permanent villages and 
engaged in agriculture, especially cotton cultivation. Since the 
1980s, they have been migrating to regional urban centers. In 
1996, of an estimated 500,000 Turkmens in Iran, about 20 per- 
cent lived in the city of Gonbad-e Kavus, while another 20 per- 
cent lived in other towns and the ethnically mixed provincial 
capital, Gorgan. 

In the northeastern part of Ardabil Province live some 50 
tribes collectively called the Ilsavan (formerly known as the 
Shahsavan). The Ilsavan, whose population in Iran is estimated 
at 75,000 to 100,000, are largely pastoral nomads who spend 
summer on the high slopes of Mount Sabalan and winter in the 
lowland Dasht-e Moghan, adjacent to the Aras River, which 
forms the frontier between Iran and the Republic of Azer- 



98 



A nomadic Oashqai family moving to new grazing ground 
Courtesy United Nations (S.Jackson) 

baijan. The Afshars, of approximately equal numbers as the 
Ilsavan, are scattered throughout Iran. A seminomadic people 
who speak a dialect akin to Azerbaijani, the Afshars are found 
along the shores of Lake Urmia, around the city of Zanjan, 
along the borders of Kurdistan, south of the city of Kerman, 
and in North, Razavi, and South Khorasan provinces. These 
separated groups are estimated to total 100,000, but they do 
not recognize a common identity or have any political unity. 
Nevertheless, they all refer to themselves as Afshars and differ- 
entiate themselves from other groups, both Turkic and non- 
Turkic, that surround them. Among several other very small 
Turkic-speaking groups, the Qajars are the most notable. The 
Qajars, who live in rural areas of Mazandaran Province, are the 
tribe of the royal family that Reza Shah dethroned in 1925. 

Semitic Groups 

Arabic and Assyrian are the two Semitic languages spoken in 
Iran. The Arabic dialects are spoken in Khuzestan Province 
and along the Persian Gulf coast. They are modern variants of 
the older Arabic that formed the base of the classical literary 
language and all the colloquial languages of the Arabic-speak- 
ing world. There is no linguistic relationship between Arabic 
and Persian, although Persian vocabulary has many loanwords 



99 



Iran: A Country Study 



from Arabic. Arabic also continues to be the language of prayer 
of all Muslims in Iran. Children in school learn to read the 
Quran in Arabic. Persian- and Turkic-speaking Iranians who 
have commercial interests in the Persian Gulf area often learn 
Arabic for business purposes. 

In 1996 an estimated 1.0 to 1.3 million Arabs lived in Iran. A 
majority lived in Khuzestan Province, where they constituted a 
significant ethnic minority. Most other Arabs lived along the 
Persian Gulf coast between Bushehr and Bandar-e Abbas, 
although there also were small scattered tribal groups living in 
central and eastern Iran. About 50 percent of Arabs are urban 
dwellers, concentrated in such cities as Abadan, Ahvaz, Bandar- 
e Abbas, Bushehr, and Khorramshahr. The majority of urban 
Arab adult males are unskilled workers, especially in the oil 
industry. Arabs also work in commerce and services, and a 
small group of Arab professionals has been emerging since the 
1980s. Some urban Arabs and most rural Arabs are tribally 
organized. The rural Arabs of Khuzestan tend to be farmers 
and fishermen. Many Arabs who live along the Persian Gulf 
coast derive family incomes from fishing or from operating 
dhows (small boats) involved in the lucrative trade between 
Iran and the Arab states of the Persian Gulf. There are some 
Arab pastoral tribes. 

Both the urban and rural Arabs of Khuzestan are intermin- 
gled with the Persians, Turks, and Lurs who also live in the 
province and collectively outnumber the Arabs. The Khuzestan 
Arabs are Shia Muslims, and this common religion facilitates 
intermarriage between Arabs and other Iranians. Nevertheless, 
the Arabs tend to regard themselves as separate from non- 
Arabs and usually are so regarded by other Iranians. Both 
before and after the Revolution, the government of neighbor- 
ing Iraq claimed that the Khuzestan Arabs suffered discrimina- 
tion and asserted its readiness to assist their "liberation" from 
Tehran. When Iraq invaded Iran in 1980, however, an antici- 
pated uprising of the Arab population did not occur; most 
local Arabs fled the area together with the non-Arab popula- 
tion. The Arabs in the area stretching from Bushehr to Bandar- 
e Abbas are predominantly Sunni Muslims who differentiate 
themselves by religion from the Arabs in Khuzestan as well as 
from most non-Arab Iranians. 

The other Semitic people of Iran are the Assyrians, a Chris- 
tian group that speaks modern dialects of Assyrian, an Aramaic 
language that evolved from Old Syriac. Language and religion 



100 



The Society and Its Environment 



provide a strong cohesive force and give the Assyrians a sense 
of identity with their coreligionists in Iraq, in other parts of the 
Middle East, and in the United States. Most Assyrians belong to 
the Assyrian Church of the East (sometimes referred to as the 
Nestorian Church); a smaller group of Roman Catholic Assyri- 
ans generally are referred to as Chaldeans (see Non-Muslim 
Minorities, this ch.). 

The 1996 census identified about 32,000 Assyrians in Iran. 
More than 50 percent of Assyrians live in Tehran, which has 
been a magnet for this minority since the early 1950s. However, 
more than 15,000 Assyrians still live in and around Orumiyeh, 
which has been the traditional home of Assyrians in Iran for 
centuries. Since 1979, many Assyrians have emigrated, reset- 
tling primarily in the United States. As a result of this migra- 
tion, the Assyrian population in Iran has not increased since 
the Revolution. 

Armenians 

The Armenians, a non-Muslim minority that traditionally has 
lived in northwestern Iran, speak an Indo-European language 
that is distantly related to Persian. Large numbers of Arme- 
nians have emigrated since the Revolution; in 2000 the Arme- 
nian population was estimated at 300,000, about 15 percent 
less than in 1979. Iran's Armenians are predominantly urban 
dwellers. An estimated 65 percent of them live in Tehran, 
which since the early 1970s has been the primary Armenian 
cultural center in Iran. Sizable Armenian communities also live 
in Esfahan, Tabriz, and Orumiyeh. Armenians in Iran tend to 
be relatively well educated, maintain their own schools, and 
support Armenian-language newspapers. 

Most Armenians are Gregorian Christians, although some 
are Roman Catholic and Protestant as a result of European and 
American missionary work in Iran during the nineteenth and 
early twentieth centuries. Although Iranian Armenians wel- 
comed the independence of Armenia in 1991, few of them 
have immigrated there; virtually all Armenian emigration from 
Iran has been to the United States. 

Structure of Society 

Iranians have a very strong sense of class structure. In the 
past, they referred to their society as being divided into three 
tiers, or tabagheh: the first, corresponding to the upper classes; 



101 



Iran: A Country Study 

the second, to the middle classes; and the third, to the lower 
classes. Under the influence of revolutionary ideology, society 
is now perceived as being divided into the wealthy, a term gen- 
erally having negative connotations; the middle class; and the 
mostazafin. In reality, Iranian society always has been more com- 
plex than the three-tier division implies because each of the 
three broad classes is subdivided into several social groups. 
These divisions have existed in both urban and rural areas. 

Urban Society 

Historically, towns in Iran have been administrative, com- 
mercial, and manufacturing centers. The traditional political 
elite consisted of the shah and his family as well as non-royal 
families, whose wealth was derived from land and/ or trade and 
from which were recruited the official representatives of the 
central government. In larger cities, these families traced their 
power and influence back several generations. In the largest 
cities, the families of Shia clergy also were influential. The mid- 
dle stratum included merchants and owners of artisan work- 
shops. The lowest class of urban society included artisans, 
laborers, and providers of personal services such as barbers, 
bath attendants, shoemakers, tailors, and servants. Most arti- 
sans were organized into trade associations or guilds and 
worked in the covered bazaars, historically the heart of Iranian 
towns. Merchants also had their shops in the bazaars, which in 
the largest cities also contained warehouses, restaurants, baths, 
mosques, schools, and gardens. 

The modernization policies of the Pahlavi shahs both pre- 
served and transformed urban society. The extension of central 
government authority throughout the country fostered the 
expansion of administrative apparatuses in all major provincial 
centers. Parts of the traditional bazaars were demolished to cre- 
ate new streets lined with European-style stores. By the 1970s, 
modern factories had displaced numerous artisan workshops 
in the bazaars, and merchants were encouraged to locate retail 
shops along the new streets rather than in the bazaars. During 
the last years of the Pahlavi dynasty, the political elite described 
the bazaars as symbols of backwardness and advanced plans to 
replace them with modern shopping malls. 

One consequence of the Revolution was the revitalization of 
the traditional bazaar, especially in larger cities. Another conse- 
quence was the intensive rural-to-urban migration of the 1980s. 
This population movement led to the development of sprawl- 



102 



Rooftops in Yazd, central Iran 
Courtesy Nader Davoodi 



ing cities with new suburban areas, or shahraks (literally, little 
towns) , where European-style shopping streets and even Amer- 
ican-style enclosed shopping malls were built rather than tradi- 
tional bazaars. The growth of cities proceeded in tandem with 
the spread of education; the expansion of medical services, 
electrification, water delivery systems, communications, and 
highways; and the emergence of many new urban occupations 
in manufacturing and services. This job diversity has contrib- 
uted to a greater differentiation of social groups. 

The Revolution swept aside the old political elite — the shah, 
his family, and the official representatives of the monarchy in 
the capital and provincial centers. Although members of the 
old political elite were not physically removed, they were 
stripped of their power. The new elite consisted of the higher 
ranks of the Shia clergy and the nonclerical political leaders 
who had organized antigovernment demonstrations and work 
strikes over the course of several months. The most important 
administrative, military, and security positions were filled by 
these lay politicians who supported the rule of the clergy. Most 
members of the lay political elite had their origins in the pre- 
revolutionary middle class, especially the bazaar families, but a 
significant minority were of rural origin. 



103 



Iran: A Country Study 



Social Class in Contemporary Iran 

In the postrevolutionary era, access to political power, an 
important basis for measuring influence and elite status in pre- 
revolutionary Iran, has continued to be important for ascribing 
status, even though the composition of the political elite has 
changed. For 10 years after 1979, gaining entry to the political 
elite at the national or provincial level depended on having rev- 
olutionary credentials, that is, being able to provide evidence 
of having participated in the demonstrations and other revolu- 
tionary activities during 1978-79, and having a reputation for 
being a good Muslim, that is, attending public prayers and 
observing Islamic codes of conduct in one's private life. Revolu- 
tionary credentials became less significant for the generation 
that matured after the early 1990s. Education, especially a col- 
lege degree, became an informal substitute for revolutionary 
credentials. 

The Upper Class 

The postrevolutionary upper class consisted of some of the 
same social groups as the old elite, such as large landowners, 
industrialists, financiers, and large-scale merchants. These 
groups had remained in Iran after 1979 and had retained 
much of their wealth. For the most part, however, such persons 
did not occupy positions of political influence, although they 
maintained various ties to politically influential people. Those 
with political influence comprised senior clergy, high-ranking 
bureaucrats, executive officers of public and private corpora- 
tions and charitable foundations, and wealthy entrepreneurs; 
none had been part of the prerevolutionary economic and 
social elite. Although a reputation for piety and loyalty to the 
ideals of the Revolution initially was a more important attribute 
than family or wealth for participation in the postrevolutionary 
political elite, those who attained politically powerful positions 
received generous salaries that elevated them to the top 
income brackets and opened access to multiple legitimate 
opportunities for acquiring more wealth. The children of the 
new elite generally have been encouraged to get college educa- 
tions, and postgraduate degrees from foreign universities have 
become status symbols since the mid-1990s. These social trends 
have gradually but informally altered the criteria for recruit- 
ment into the political elite: Possessing a university degree and 
having ties to a prominent religious or revolutionary family 



104 



The Society and Its Environment 



have become advantageous in the competition for politically 
influential positions. 

The Middle Class 

After the Revolution, the composition of the middle class 
did not change significantly, but its size doubled from about 15 
percent of the population in 1979 to more than 32 percent in 
2000. Several prerevolutionary social groups still were identifi- 
able, including entrepreneurs, bazaar merchants, physicians, 
engineers, university teachers, managers of private and public 
concerns, civil servants, teachers, medium-scale landowners, 
junior military officers, and the middle ranks of the Shia clergy. 
New groups also emerged, including technicians in specialized 
fields such as communications, computers, electronics, and 
medical services; owners of small-scale factories employing 
fewer than 50 workers; owners of construction firms and trans- 
port companies; and professional staff of broadcast and print 
media. Merchants, especially those with ties to bazaar-based 
organizations even though their stores were physically located 
outside the traditional covered bazaars, gained access to politi- 
cal power that they had lacked before the Revolution. 

The prerevolutionary cultural divide between those middle- 
class individuals who had a secular outlook and those who val- 
ued a role for religion in both public and private life did not 
disappear. Since 1979, however, the political relationship 
between these two contrasting views has reversed. Whereas 
under the monarchy the state tried to restrict religion to the 
private sphere, under the Islamic Republic the state con- 
sciously has promoted religion in public life. Secularly oriented 
Iranians have tended to resent this dominant role of the reli- 
gious outlook in politics and society, especially its manifesta- 
tions in numerous laws and regulations that they perceive as 
interfering with their personal lives. Whereas the secular-reli- 
gious divide cuts across all occupational groups, in general 
those who promote religious values and the public observance 
of prayers and religious rituals tend to be more heavily concen- 
trated in the bazaar, security forces, and managerial positions 
in the bureaucracies than in other lines of work and other pro- 
fessions. 

The Working Class 

An urban industrial working class separate from the tradi- 
tional artisan class of the towns has been in the process of for- 



105 



Iran: A Country Study 

mation since the early twentieth century. The industrialization 
programs of the Pahlavi shahs provided the impetus for the 
expansion of this class. By the early 1970s, a distinct working- 
class identity, kargar, had emerged, although those who applied 
this term to themselves did not constitute a unified group. 
Rather, the working class was segmented by economic sectors: 
the oil industry, manufacturing, construction, and transporta- 
tion; also, many members of the working class were employed 
as mechanics. The largest component, factory workers, num- 
bered about 2.5 million on the eve of the Revolution, double 
the number in 1965, accounting for 25 percent of Iran's total 
labor force (see The Distribution of Employment, ch. 3). 

Since 1979, the urban working class has continued to 
expand; by the early 2000s, it constituted more than 45 percent 
of the employed labor force. As was the situation before the 
Revolution, however, the workers within any one occupation 
did not share a common identity but rather were divided 
according to their perceived skills. For example, skilled con- 
struction workers, such as carpenters, electricians, and plumb- 
ers, earned significantly higher wages than the more numerous 
unskilled workers and tended to look down on them. Similar 
status differences were common among workers in the oil 
industry and manufacturing. An estimated 7 percent of all 
workers were Afghan refugees in the early 2000s. These work- 
ers were concentrated in unskilled jobs, especially in construc- 
tion. Because most Afghan workers did not have work permits 
after 1992 and thus worked illegally, employers could pay them 
less than the daily minimum wage rates and not provide them 
with benefits required for Iranian workers. 

Under both the monarchy and the republic, the government 
has strictly controlled union activity. After the Revolution, the 
Ministry of Labor established the Workers' House to sponsor 
Islamic unions in large manufacturing concerns. These unions 
discourage strikes through a combination of cooptation of 
workers through periodic raises and bonuses and cooperation 
with authorities to identify and discipline workers who exhibit 
tendencies toward independence. The Islamic unions gener- 
ally have been effective in preventing major strikes by workers; 
a long history of factionalism among different working-class 
occupational groups and between skilled and unskilled workers 
within individual industries has contributed to this relative suc- 
cess. Nevertheless, since the early 1990s scattered strikes have 
defied union control. In some instances, the strikes have been 



106 



A provincial coffeeshop 
Courtesy Nader Davoodi 




resolved peacefully through negotiations, while in other cases 
they have been repressed violently by security forces. 

The Lower Class 

The working class is part of the overall urban lower class, or 
mostazaftn, a social stratum that includes all families whose 
household incomes place them marginally above, at, or below 
the officially defined poverty line. In cities with populations 
greater than 250,000, the lower class makes up an average of 40 
to 50 percent of the total population; the lower-class propor- 
tion generally is less in smaller cities (50,000 to 250,000 popula- 
tion) and towns. 

The lower class can be divided into two groups: the margin- 
ally poor, who receive regular incomes on a weekly or monthly 
basis; and the very poor, whose incomes vary from month to 
month and who thus experience difficulty in paying for food, 
housing, and utilities. Recipients of regular incomes include 
pensioners, industrial and construction workers, and people 
employed in the diverse services sector, such as attendants in 
barbershops, beauty salons, and public bathhouses, bakery 
workers, sales clerks, domestic servants, gardeners, garbage and 
trash collectors, painters and plasterers (of homes), porters, 
street cleaners, peddlers, street vendors, office cleaners, and 



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Iran: A Country Study 



laundry workers. These job categories, as well as others, also 
include at least 1 million workers who are employed only occa- 
sionally or seasonally, primarily as a result of the shortage of 
full-time positions in an economy that has had an official unem- 
ployment rate ranging between 10 and 15 percent of the labor 
force since the early 1990s. Although many government agen- 
cies and private charities provide assistance to the poor, a social 
stigma is associated with accepting such aid, especially among 
adult men, whom others judge according to their ability to sup- 
port a family. Among some marginally poor people in the larg- 
est cites, especially families with female heads of household, 
there has been an increasing tendency since the mid-1990s to 
rely on begging to supplement income, A few poor neighbor- 
hoods in the largest cities, such as Khakh-e sefid in southeasten 
Tehran Province, have acquired negative reputations because 
gangs have established safe houses there for illegal activities 
such as prostitution, gambling, and drug trafficking. 

Urban Migration 

A main characteristic of the burgeoning urban lower class is 
its peasant origins. The rapid expansion of this class since the 
1960s has been the result of migration from villages to cities. By 
the early 1970s, urban services no longer could keep pace with 
the population growth, and slum neighborhoods developed in 
Tehran and other large cities. Immediately after the Revolu- 
tion, the government initiated two programs aimed at improv- 
ing conditions in urban slums and villages. In the latter case, 
the programs also had the objective of stanching rural-to-urban 
migration. New shahraks replaced slum neighborhoods and 
offered low-income families affordable housing with electricity, 
piped water, and sewerage connections. Schools, libraries, cul- 
tural centers, health clinics, and sports facilities were integral 
parts of the new shahraks. These new neighborhoods could not 
eliminate poverty, but they improved the overall quality of life 
for most low-income residents in urban areas. The same also 
has been true for the villages, although the major improve- 
ment in the quality of rural life did not halt rural-to-urban 
migration, which continued at an even higher rate between 
1980 and 1996 than in the prerevolutionary years. 

Rural Society 

At the time of the Revolution, Iran had 70,000 villages. 
Social organization in these villages was less stratified than in 



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The Society and Its Environment 



urban areas, but a hierarchy of political and social relationships 
and patterns of interaction could be identified. At the top of 
the village social structure was the largest landowner or owners. 
In the middle stratum were peasants who owned medium-sized 
farms. In the larger villages, the middle stratum also included 
local merchants and artisans. The lowest level, which predomi- 
nated in most villages, consisted of landless villagers and peas- 
ants who owned subsistence plots. Traditionally, the kadkhoda 
(see Glossary) — not to be confused with the head of the small- 
est tribal unit, a clan — was responsible for administering village 
affairs and for representing the village in relations with govern- 
mental authorities and other outsiders. 

The land reform and various rural development programs 
undertaken prior to the Revolution did not help most villagers. 
Economic conditions for most village families stagnated or 
deteriorated at the same time as manufacturing and construc- 
tion were experiencing an economic boom in urban areas. 
Consequently, there was a significant increase in rural-to-urban 
migration. Between the 1966 and the 1976 censuses, a period 
when the population of the country as a whole was growing at 
the rate of 2.7 percent per year, most villages actually lost popu- 
lation, and the rural population's overall growth rate was barely 
0.5 percent annually. This migration was primarily of young vil- 
lagers attracted to cities by the prospect of seasonal or perma- 
nent work opportunities. By the late 1970s, this migration had 
depleted the labor force of many villages. This was an impor- 
tant factor in the relative decline in production of such basic 
food crops as cereals because many farming families were 
forced to sow their agricultural land with less labor-intensive 
crops. 

The problems of rural stagnation and agricultural decline 
had surfaced in public debate by the eve of the Revolution. 
During the immediate turmoil surrounding the fall of the 
monarchy, peasants in many villages took advantage of the 
unsettled conditions to expropriate the property of large land- 
owners whom they accused of being un-Islamic. These actions 
forced the new republican government to tackle the land prob- 
lem. This issue was hotly contested between officials who saw 
peasant expropriations as a solution to inequitable land distri- 
bution and others who opposed such expropriations on the 
ground that Islamic law protects private property. In the end, 
no national policy was formulated; local courts adjudicated the 
land disputes on a case-by-case basis, and less than 10 percent 



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Iran: A Country Study 



of cultivated land in Iran actually was transferred from large to 
smaller owners. 

Unlike land redistribution, rural development was widely 
considered a high priority among the postrevolutionary politi- 
cal elite. A new organization for rebuilding villages, the Cru- 
sade for Reconstruction (Jihad-e Sazandegi, or Jihad), was 
created in 1979. At first it consisted of high-school-educated 
youth, largely from villages, who initiated such village improve- 
ment projects as providing electrification and piped water, 
building feeder roads, constructing mosques and bathhouses, 
and repairing irrigation networks. The operational approach 
was to involve the villagers in the projects, including their plan- 
ning, construction, and even partial financing, although over- 
all direction was from Tehran via the provincial Jihad offices. 
As a result of these activities, more than 90 percent of villages 
had electricity and piped water by 2000, as well as access to 
rural schools, health clinics, and improved secondary roads 
that connected to highways. This rural infrastructure signifi- 
cantly improved the overall quality of life in villages. However, 
because the prerevolutionary pattern of landownership was not 
altered — about 75 percent of farmers continued to cultivate 
the equivalent of subsistence plots — the majority of rural 
households remained poor. 

Nomadic Society 

The long-standing decline in the number of tribally orga- 
nized, pastoral nomads continued after the Revolution. 
According to the 1996 census, about 1.2 million persons in 
180,000 households continued to practice pastoral nomadism 
on a year-round basis. This represented a decrease of 40 per- 
cent from the mid-1960s, when 400,000 families (about 2 mil- 
lion persons) engaged in pastoral nomadism. The nomadic 
population practices a form of seasonal migration known as 
transhumance: one migration in the spring to upland summer 
pastures and a fall migration to lowland winter pastures. Each 
tribe claims the use of fixed territories for its pastures and the 
right to use a specified migration route between these areas, 
which can be separated by as much as 300 kilometers. In the 
past, each migration could take as much as two months, but 
since the early 1990s an increasing reliance on pickup trucks 
has shortened this process to a few days. 

The movements of the tribes appear to be an adaptation to 
the ecology of the Zagros Mountains. In summer, when the low 



110 



Residential neighborhood in the village ofMasooleh, northern Iran 
Dates drying in the village of Abyaneh, central Iran 
Courtesy Nader Davoodi 

valleys are parched, the tribes are at the verdant higher eleva- 
tions. When night frosts begin to limit pasture growth in the 
higher valleys, the tribes migrate to low-lying pastures that 
remain green throughout the winter because of the seasonal 
rainfall. The nomadic tribes keep large herds of sheep and 
goats, animals that traditionally have provided the main source 
of red meat for Iranians. During migrations the tribes trade 
their live animals, wool, hair, hides, dairy products, and various 
knotted and woven textiles with villagers and townspeople for 
manufactured and agricultural goods. This economic interde- 
pendence between the nomadic and settled populations of 
Iran has been an important characteristic of society for several 
centuries. 

During the Qajar dynasty (1795-1925), when the central 
government was especially weak, the nomadic tribes formed 
tribal confederations and acquired a great deal of power and 
influence. In many areas, these confederations were virtually 
autonomous, negotiating with the local and national govern- 
ments for extensive land rights. Reza Shah moved against the 
tribes with the new national army that he created. His tribal 



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Iran: A Country Study 

policy had two objectives: to break the authority and power of 
the great tribal confederation leaders, whom he perceived as a 
threat to his goal of centralizing power, and to gain the alle- 
giance of urban political leaders, who had historically resented 
the power of the tribes. In addition to military maneuvers 
against the tribes, Reza Shah used economic and administra- 
tive techniques such as confiscating tribal properties and hold- 
ing chiefs' sons as hostages. Eventually, many nomads were 
subdued and placed under army control. Some were given gov- 
ernment-built houses and forced to lead a sedentary life. 
Mohammad Reza Shah Pahlavi (r. 1941-79) continued the pol- 
icy of weakening the political power of the nomadic tribes, but 
efforts to coerce them into settling were abandoned. Several 
tribal leaders were exiled, and the military was given greater 
authority to regulate tribal migrations. Tribal pastures were 
nationalized during the 1960s as a means of permitting the gov- 
ernment to control access to grazing. In addition, various edu- 
cational, health, and vocational training programs were 
implemented to encourage the tribes to settle voluntarily. 

Following the Revolution, several former tribal leaders 
attempted to revitalize their tribes as major political and eco- 
nomic forces. But many factors worked against this effort, 
including the hostile attitude of the central government, the 
decline in size of the nomadic population as a result of the set- 
tlement of large numbers of tribal people in the 1960s and 
1970s, and, as a consequence of settlement, a change in atti- 
tudes toward nomadic life, especially among tribal youth raised 
in villages and towns. By the mid-1980s, the nomadic tribes 
were no longer a political force in Iranian society. The central 
government had demonstrated its ability to control the migra- 
tion routes, and the leadership of the tribes effectively was dis- 
persed among a new generation of nonelite tribesmen who did 
not share the views of the old elite. 

The Family 

For most Iranians, the reciprocal obligations and privileges 
that define relations among kinfolk — from the parent-child 
bond to more distant connections — are more important than 
those associated with any other kind of social alignment. Eco- 
nomic, political, and other forms of institutional activity have 
been affected significantly by family ties. This is true not only 
for the nuclear family of parents and offspring but also for the 



112 



The Society and Its Environment 



aggregate kinfolk, near and distant, who together represent 
the extended family. 

Historically, an influential family was one whose members 
were distributed strategically throughout the most vital sectors 
of society, with each person prepared to support the others in 
order to ensure overall family prestige and status. Since the 
Revolution, this has meant that each of the elite families of 
Tehran and the major provincial centers includes a cadre of 
clergy, bureaucrats, and the Islamic Revolutionary Guard 
Corps or Revolutionary Guards (Pasdaran; in full, Pasdaran-e 
Enghelab-e Island; see The Islamic Revolutionary Guard Corps 
(IRGC), ch. 5). Successful members are expected to help less 
successful ones get their start. Iranians view this inherent nepo- 
tism as a positive value, not as a form of corruption. Business 
operations continue to be family affairs; often, large govern- 
ment loans for business ventures are obtained simply because 
entrepreneurs are recognized as members of families with 
good Islamic and revolutionary credentials. Political activities 
also follow family lines. Several brothers or first cousins, for 
example, tend to be aligned with the same political faction. 
This is true even in the case of armed opposition groups, such 
as the Mojahedin-e Khalq (People's Fighters). A person with- 
out family ties has little status in the society at large. 

The head of the household — the father and husband — tradi- 
tionally expected obedience and respect from others in the 
family. In return, he was obligated to support them and to sat- 
isfy their spiritual, social, and material needs. In practice, fam- 
ily roles have been undergoing considerable change since the 
Revolution, and the father's role as a strict disciplinarian has 
been challenged by the postrevolutionary generation. The 
average age of first marriage has risen significantly for both 
men and women, which means that children — both daughters 
and sons — have been remaining in their parental home until 
they are in their 20s. Since the late 1980s, many fathers, espe- 
cially in small towns and rural areas, have encouraged daugh- 
ters to delay marriage in favor of obtaining a secondary school 
and even college education. 

Religious law defines the conditions for marriage, divorce, 
inheritance, and guardianship. Additional laws have been 
passed by the parliament (Majlis — see Glossary) that reinforce 
and refine religious law and are designed to protect the integ- 
rity of the family. Marriage regulations are defined by Shia reli- 
gious law, although non-Shias are permitted to follow their own 



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Iran: A Country Study 



religious practices. Before the Revolution, the legal marriage 
age was 21 for males and 18 for females, although most couples 
married at a younger age. Immediately after the Revolution, 
the minimum legal age of marriage for males and females was 
lowered to 15 and 13 years, respectively. The average age of 
first marriage fell immediately, and by the mid-1980s an esti- 
mated 2.4 percent of girls younger than 15 were married. How- 
ever, when the generation of youth who participated in the 
Revolution (aged 18-25 during 1978-79) began assuming posi- 
tions of political authority in the early 1990s, they initiated vari- 
ous reforms, including enactment of a law that raised the legal 
marriage age to 18 for males and 15 for females. As a result, by 
2002 the average age at first marriage had risen to 22 for men 
and 19 for women. 

The selection of a marriage partner normally is determined 
by customary preference, economic circumstances, and geo- 
graphic considerations. Traditionally, there was a distinct pref- 
erence for marriage within extended kin networks, which 
accounted for a a high incidence of marriages among first and 
second cousins. An "ideal" marriage was between the children 
of two brothers, although this kind of consanguineous mar- 
riage was becoming less common among the old regime elite 
and secular middle class by the eve of the Revolution. In the 
early 2000s, although a majority of marriages were still between 
couples with some kinship relationship, surveys found that 
more than 60 percent of men and more than 40 percent of 
women disapproved of such marriages. 

Marriage arrangements continue to follow traditional pat- 
terns. When a young man is ready for marriage, he asks his par- 
ents to visit the parents of a girl whom he would like to marry. 
If the girl's parents are agreeable, the two families negotiate 
the amount of the bride-price that will be given to the bride's 
family at the time of marriage. The exact sum varies according 
to the wealth, social position, and degree of kinship of the two 
families. Once they have agreed to the marriage, the prospec- 
tive bride and groom are considered engaged. Generally, the 
engagement lasts less than 12 months. The actual marriage 
involves a contractual ceremony and a public celebration, or 
wedding. One significant feature of the marriage contract is 
the mahriyeh (see Glossary), a stipulated sum that the husband 
must give his wife in the event of divorce. 

In the early 2000s, polygyny was still practiced in Iran. It is 
regulated by Islamic custom, which permits a man to have as 



114 



The Society and Its Environment 



many as four wives simultaneously, provided that he treats 
them equally. During the 1990s, the Majlis enacted laws that 
required a man to provide evidence of his first wife's nonco- 
erced agreement to his taking a second spouse and of adequate 
financial resources to support two households. The incidence 
of polygyny actually is very low because of widespread social dis- 
approval, especially among men and women born after 1950. 

Shia Islam, unlike Sunni Islam, also recognizes a form of 
temporary marriage called muta. In a muta marriage, the man 
and woman sign a contract agreeing to live together as hus- 
band and wife for a specified time, which can be as brief as sev- 
eral hours or as long as 99 years. The man agrees to pay a 
certain amount of money for the duration of the contract. Pro- 
vision also is made for the support of any offspring. The num- 
ber of muta marriages that a man may contract is not limited. 
Although muta marriages may be registered as legal contracts, 
there is widespread social disapproval of the practice; some 
women's groups openly condemn muta as legalized prostitu- 
tion. In the early 2000s, the practice appeared to be limited to 
some members of the political and economic elite. 

Traditionally, in Iran men could divorce their wives unilater- 
ally according to the guidelines of Islamic law; women were 
permitted to leave their husbands only on narrowly defined 
grounds, such as insanity or impotence. Although the postrevo- 
lutionary government initially rescinded monarchy-era legisla- 
tion that had liberalized access to divorce for women, by 1985 
new laws permitted women to initiate divorce proceedings in 
certain limited circumstances. Women's right to divorce was 
strengthened in the 1990s, and by the end of the decade 
women actually were initiating more divorce petitions than 
men. The divorce rate in Iran is low in comparison with that in 
many European countries and the United States because of 
family and societal pressures on couples to work out their dif- 
ferences. By the early 2000s, the rate had risen to 0.7 divorces 
per 1,000 marriages. 

Gender Issues 

Traditional Attitudes Toward Segregation of the Sexes 

With the exception of the Westernized and secularized 
upper and middle classes, Iranian society before the Revolu- 
tion practiced public segregation of the sexes. Women gener- 
ally wore the chador when in public and indoors when males 



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Iran: A Country Study 



not related to them were present. The majority of Iranians 
envisioned an ideal society as one in which women stayed at 
home, performing domestic tasks associated with managing a 
household and rearing children. Men worked in the public 
sphere — fields, factories, bazaars, and offices. Deviations from 
this ideal, especially in the case of women, tended to reflect 
adversely on the reputation of the family. Gender segregation 
also was practiced in the public education system, which main- 
tained separate schools for boys and girls at the elementary 
through secondary levels. 

By the late 1960s, the majority attitudes on the segregation 
of women clashed sharply with the views and customs of the 
secularized upper and middle classes, especially in Tehran. For 
these latter groups, mixed gatherings, both public and private, 
became the norm. During the Pahlavi era, the government was 
the main promoter of change with respect to social attitudes 
toward gender segregation. It banned the wearing of the 
chador at official functions and encouraged mixed participa- 
tion in a variety of public gatherings. One result was to bring 
the government into conflict with non-elite social values, which 
were defended by the Shia clergy. 

Among the ideas imported into Iran from the West was the 
notion that women should participate in the public sphere. The 
Pahlavi government encouraged women's education and their 
participation in the labor force. After Reza Shah banned the 
chador in 1936, veiling came to be perceived among the elite 
and secular middle-class women, who were a minority among 
female Iranians, as a symbol of oppression. Before the Revolu- 
tion, Iranian society already was polarized between the values of 
the majority of women and those of a minority 7 who embraced 
American and European feminist values. Some of the latter had 
a genuine interest in improving the status of all women. As 
early as 1932, such women held a meeting of the Oriental Femi- 
nine Congress in Tehran at which they called for the right of 
women to vote, compulsory education for both boys and girls, 
equal salaries for men and women, and an end to polygyny. The 
White Revolution reforms of 1963 included granting women 
the right to vote and to hold public office (see The Post-Mos- 
sadeq Era and the Shah's White Revolution, ch. 1). 

Female Participation in the Workforce 

On the eve of the 1979 Revolution, only about 14 percent of 
women aged 10 years and older participated in the paid labor 



116 



The Society and Its Environment 

force. Three patterns of work existed among women. Among 
the upper classes, women worked either as professionals or vol- 
unteers. Whereas secular middle-class women aspired to follow 
this model, traditional middle-class women worked outside the 
home only from dire necessity. Lower-class women frequently 
worked outside the home, especially in major cities, because 
their incomes were needed to support their households. 

Women were active participants in the revolution that top- 
pled the shah. Some activists were professional women of the 
secular middle class, among whom political antagonists to the 
regime had long been recruited. Like their male counterparts, 
such women had nationalist aspirations and denounced the 
shah's regime as a U.S. puppet. Some women also participated 
in guerrilla groups such as the Fedayan-e Khalq (People's War- 
riors) and the Mojahedin-e Khalq (People's Fighters). More 
significant, however, were the large numbers of lower-class 
women in the cities who participated in street demonstrations 
during the latter half of 1978 and early 1979. They responded 
to Khomeini's call for all Muslims to demonstrate opposition to 
the tyranny of the shah. 

Following the Revolution, the new republican government 
called for the participation of women in an "Islamic society," 
because such a society would not be "morally corrupt" like the 
deposed monarchy. Observance of hejab would assure respect 
for women. Hejab eventually was defined as clothing that con- 
cealed the shape of a woman's figure, such as loose outer gar- 
ments, and covered her hair and skin, leaving only her face and 
hands exposed. The requirement to observe hejab in public was 
controversial among the minority of secularized women who 
never had worn a chador. However, for the majority of women 
who always had worn the chador, hejab served to legitimate 
their presence in the public sphere, especially in work outside 
the home. Nevertheless, because so many professional women 
with jobs emigrated from Iran between 1979 and 1981 and 
because the postrevolutionary government compelled families 
to send underage girls to school rather than to work, the num- 
ber of women in the paid labor force declined form 14 percent 
in 1976 to 9 percent in 1986; it rose gradually to 11 percent by 
1996. 

In the early 2000s, women made up 16 percent of the urban 
labor force and 14 percent of the rural labor force. The govern- 
ment was a major employer of women, especially the ministries 
of education and health. Moreover, the variety of jobs available 



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Iran: A Country Study 

for women expanded in the private sector, including positions 
for women as bus and taxi drivers. The increasing numbers of 
employed women prompted interest in work-related discrimi- 
nation against women. Several women deputies in the Majlis, 
for example, sponsored legislation that required employers to 
give women workers the same pay and fringe benefits received 
by their male counterparts. The monthly magazine Zanan regu- 
larly published articles dealing with issues of concern to work- 
ing women. The magazine's periodic sample surveys 
documented positive developments in urban areas, such as 
declining fertility, the rise in the age of first marriage for 
women, and steadily increasing numbers of women entering 
college. However, the surveys also showed that few qualified 
women were promoted to managerial positions in either the 
public or private sector. In the late 1990s, women's rights 
groups began launching campaigns to sensitize the public to 
issues such as unequal pay, the lack of paid maternity leave, 
inadequate job-site nurseries and childcare facilities, and lim- 
ited access for women employees to training programs. All 
these activities contributed to a heightened public awareness 
about the status of working women. Government responses 
included the establishment of women's affairs divisions in sev- 
eral government ministries and in the president's office, as well 
as financial support for women's studies centers in the public 
colleges and universities. 

Religion 

Shia Islam in Iran 

The overwhelming majority of Iranians — at least 90 percent 
of the total population — are Muslims who adhere to Shia 
Islam. In contrast, the majority of Muslims throughout the 
world follow Sunni Islam. Of the several Shia sects, the Twelve 
Imam, or Twelver (ithna-ashari), is dominant in Iran; most Shias 
in Bahrain, Iraq, and Lebanon are also members of this sect. 
All the Shia sects originated among early Muslim dissenters in 
the first three centuries following the death of the Prophet 
Muhammad in A.D. 632 (see Islamic Conquest, ch. 1). 

The principal belief of Twelvers, but not of other Shias, is 
that the spiritual and temporal leadership of the Muslim com- 
munity passed from Muhammad to his cousin and son-in-law 
Ali and then sequentially to 1 1 of Ali's direct male descendants. 
Sunnis reject this tenet. Over the centuries, various other theo- 



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The Society and Its Environment 



logical differences have developed between Twelver Shias and 
Sunnis. 

Distinctive Beliefs 

Although Shias have lived in Iran since the earliest days of 
Islam, it is believed that most Iranians were Sunnis before the 
seventeenth century. The Safavi dynasty (1501-1722) made 
Shia Islam the official state religion in the sixteenth century. 
The early Safavi shahs imported Shia clergy from historical 
Shia centers in Bahrain, Iraq, and Lebanon and supported an 
aggressive proselytization campaign on behalf of the new reli- 
gion. Historians believe that by the end of the sixteenth cen- 
tury most people in what is now Iran had become Shias. 

All Twelver Shia Muslims share with all Sunni Muslims three 
basic principles of Islam: there is one God who is a unitary 
being, not, as Christians believe, a trinitarian being; Muham- 
mad is the last of a line of prophets beginning with Abraham 
and including all the Old Testament prophets, as well as Jesus, 
and God chose Muhammad as his final messenger to human- 
kind; and there is a resurrection of the body and soul on the 
last, or judgment, day. Shias also believe in two additional prin- 
ciples of Islam: that divine justice will reward or punish believ- 
ers based on actions undertaken through their own free will, 
and that the Twelve Imams were successors to Muhammad. 
xVmong Shias, the term imam (see Glossary) traditionally has 
been applied only to Ali and his 11 descendants. In Sunni 
Islam, an imam is the leader of congregational prayer. 

All Shia Muslims believe that there are seven pillars of faith, 
which detail the acts necessary to demonstrate and reinforce 
faith. The first five of these pillars are shared with Sunni Mus- 
lims. They are shahada, or the confession of faith; namaz, or rit- 
ual prayer; zakat, or almsgiving; sawm, fasting and 
contemplation during daylight hours during the lunar month 
of Ramazan (Ramadan); and hajj, or pilgrimage to the holy cit- 
ies of Mecca and Medina once in one's lifetime if financially 
feasible. The other two pillars, which are not shared with Sun- 
nis, are jihad, or personal struggle to protect Islamic lands, 
beliefs, and institutions; and the requirement to do good works 
and to avoid all evil thoughts, words, and deeds. In addition to 
the seven principal tenets of faith, traditional religious prac- 
tices also are intimately associated with Shia Islam. These 
include the observance of the month of martyrdom, Mohar- 
ram, and pilgrimages to the shrines of the Twelve Imams and 



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Iran: A Country Study 



their various descendants. The Moharram observances com- 
memorate the death of the Third Imam, Hussein, who was the 
son of Ali and Fatima and the grandson of Muhammad. Hus- 
sein was killed in battle near Karbala in present-day Iraq in A.D. 
680. Hussein's death is commemorated by Shias with passion 
plays and is an intensely religious time. 

The distinctive dogma and institution of Shia Islam is the 
Imamate, which includes the idea that the successor of 
Muhammad is not merely a political leader but also must be a 
spiritual leader. Thus, the imam must have the ability to inter- 
pret the inner mysteries of the Quran and sharia (Islamic law — 
see Glossary) . Twelver Shias believe further that the Twelve 
Imams who succeeded the Prophet were sinless and free from 
error and had been chosen by God through Muhammad. The 
Imamate began with Ali, who also is accepted by Sunni Muslims 
as the fourth of the "rightly guided caliphs" to succeed the 
Prophet. Shias revere Ali as the First Imam, whose descendants 
continued the line of the imams until the Twelfth, who is 
believed to have ascended to a supernatural state and will 
return to earth on judgment day. Shias cite the close lifetime 
association of Muhammad with Ali as evidence for their beliefs. 
Shias believe that Ali was the first person to make the declara- 
tion of faith in Islam. He fought in all of Muhammad's battles 
except one, and the Prophet chose him to be the husband of 
his favorite daughter, Fatima. 

The Shia doctrine of the Imamate was not elaborated fully 
until the tenth century. Other dogmas were developed still 
later. A characteristic of Shia Islam is the continual exposition 
and reinterpretation of doctrine. The most recent example is 
Ayatollah Khomeini's expounding of the doctrine of velayat-e 
faqih (see Glossary), or the political guardianship of the com- 
munity of believers by scholars trained in religious law. This is 
an innovation rather than a traditional idea in Shia Islam. Its 
essential idea is that the clergy, by virtue of their superior 
knowledge of the laws of God, are the best qualified to rule the 
society of believers who are preparing themselves on earth to 
live eternally in heaven. The concept of velayat-e faqih thus pro- 
vides the doctrinal basis for theocratic government, an experi- 
ment that Twelve Imam Shias had not attempted prior to the 
Iranian Revolution in 1978-79. 



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The Society and Its Environment 



Religious Institutions and Organizations 

Historically, the most important religious institution in Iran 
has been the mosque. In towns and cities, congregational 
prayers, as well as prayers and rites associated with religious 
observances and important phases in Muslim life, took place in 
mosques. Primarily an urban phenomenon, mosques did not 
exist in most Iranian villages. In the years preceding the Revo- 
lution, Iranian Shias generally attached diminishing signifi- 
cance to institutional religion, and by the 1970s there was little 
emphasis on mosque attendance, even for the Friday congrega- 
tional prayers. During the Revolution, however, mosques in 
large cities played a prominent social role in organizing people 
for large demonstrations. Since that time, the mosques have 
continued to play important political and social roles, in addi- 
tion to their traditional religious functions. 

Another religious institution of major significance has been 
the hoseiniyeh, or Islamic center. Wealthy patrons financed con- 
struction of hoseiniyehs in urban areas to serve as sites for recit- 
als and performances commemorating the martyrdom of 
Hussein, especially during the month of Moharram. In the 
1970s, hoseiniyehs such as the Hoseiniyeh Irshad in Tehran 
became politicized as prominent clerical and lay preachers 
helped to lay the groundwork for the Revolution by referring 
to the symbolic deaths as martyrs of Hussein and the other 
imams in veiled but obvious criticism of Mohammad Reza 
Shah's regime. 

Institutions providing religious education include madras- 
sas, or seminaries, and maktabs, or primary schools run by the 
clergy. The madrassas historically were important settings for 
advanced training in Shia theology and jurisprudence. Each 
madrassa generally was associated with a noted Shia scholar 
who had attained the rank of ayatollah. Some older madrassas 
functioned like religious universities at which several scholars 
taught diverse religious and secular subjects. Students, or tala- 
behs, lived on the grounds of the madrassas and received sti- 
pends for the duration of their studies, usually a minimum of 
seven years, during which they prepared for the examinations 
that qualify a seminary student to be a low-level preacher, or 
mullah (see Glossary). At the time of the Revolution, there 
were slightly more than 11,000 talabehs in Iran, approximately 
60 percent of them at the madrassas in Qom. From 1979 to 
1982, the number of talabehs in Qom more than tripled from 
6,500. There were just under 25,000 talabehs at all levels of study 



121 




122 



A prayer meeting at the University of Tehran 
Courtesy United Nations (John Isaac) 



123 



Iran: A Country Study 



in Qom seminaries in the early 2000s, as well as about 12,000 
talabehs at seminaries in other Iranian cities. 

Maktabs started to decline in number and importance in the 
first decades of the twentieth century, once the government 
began developing a national public school system. Neverthe- 
less, maktabs continued to exist as private religious schools until 
the Revolution. Because the overall emphasis of public schools 
has remained secular subjects, since 1979 maktabs have contin- 
ued to serve children whose parents want them to have a more 
religious education (see Education, this ch.). 

Another major religious institution in Iran is the shrine. Pil- 
grimage to the shrines of imams is a specific Shia custom, 
undertaken because Shia pilgrims believe that the imams and 
their relatives have the power to intercede with God on behalf 
of petitioners. Of the more than 1,100 shrines in Iran, the most 
important are those for the Eighth Imam, Reza, in Mashhad, 
for Reza's sister Fatima in Qom, and for Khomeini in Tehran. 
Each of these is a huge complex that includes the mausoleum 
of the venerated one, tombs of various notables, mosques, 
madrassas, and libraries. Imam Reza's shrine is considered the 
holiest. In addition to the usual shrine accoutrements, it com- 
prises hospitals, dispensaries, a museum, and several mosques 
located in a series of courtyards surrounding the imam's tomb. 
The shrine's endowments and gifts are the largest of all reli- 
gious institutions in the country. Although there are no special 
times for visiting this or other shrines, it is customary for pil- 
grimage traffic to be heaviest during Shia holy periods. Visitors 
represent all socioeconomic levels. Whereas piety is a motiva- 
tion for many, others come to seek the spiritual grace or gen- 
eral good fortune that a visit to the shrine is believed to ensure. 
Since the nineteenth century, it has been customary among the 
bazaar class and members of the lower classes to recognize 
those who have made a pilgrimage to Mashhad by prefixing 
their names with the title mashti. Shrine authorities have esti- 
mated that at least 4 million pilgrims visit the shrine annually 
in the early 2000s. 

There are also important secondary shrines for other rela- 
tives of the Eighth Imam in Tehran and Shiraz. In virtually all 
towns and in many villages, there are numerous lesser shrines, 
known as imamzadehs, that commemorate descendants of the 
imams who are reputed to have led saintly lives. In Iraq the 
shrines at Karbala and An Najaf also are revered by Iranian 
Shias. Pilgrimages to these shrines and the hundreds of local 



124 



The Society and Its Environment 



imamzadehs are undertaken to petition the saints to grant spe- 
cial favors or to help one through a period of troubles. The 
constant movement of pilgrims from all over Iran has helped 
bind together a linguistically heterogeneous population. Pil- 
grims serve as major sources of information about conditions 
in different parts of the country and thus help to mitigate the 
parochialism of the regions. 

The vaqf is a traditional source of financial support for all 
religious institutions. It is a religious endowment by which land 
and other income-producing property is given in perpetuity for 
the maintenance of a shrine, mosque, madrassa, or charitable 
institution such as a hospital, library, or orphanage. A mutavalli 
administers a vaqf in accordance with the stipulations in the 
donor's bequest. In many vaqfo, the position of mutavalli is 
hereditary. Under the Pahlavis, the government attempted to 
exercise control over administration of the vaqfs, especially 
those of the larger shrines. This practice caused conflict with 
the clergy, who perceived the government's efforts as inimical 
to their influence and authority in traditional religious matters. 

The government's interference with the administration of 
v aqfi> during the Pahlavi era led to a sharp decline in the num- 
ber of t/a<^bequests. Instead, wealthy and pious Shias chose to 
give financial contributions directly to the leading ayatollahs in 
the form of zakat, or obligatory alms. The clergy, in turn, used 
the funds to administer their madrassas and to institute various 
educational and charitable programs, which indirectly pro- 
vided them with more influence in society. The access of the 
clergy to a steady and independent source of funding was an 
important factor in their ability to resist state controls, and ulti- 
mately helped them direct the opposition to the shah. 

Religious Hierarchy 

From the time that Twelver Shia Islam emerged as a distinct 
religious denomination in the early ninth century, its clergy, or 
ulama, have played a prominent role in the development of its 
scholarly and legal tradition. However, the development of the 
present hierarchy among the Shia clergy dates only to the early 
nineteenth century. Since that time, the highest religious 
authority has been vested in the mujtahids, scholars who, by vir- 
tue of their erudition in the science of religion (the Quran, the 
traditions of Muhammad and the imams, jurisprudence, and 
theology) and their attested ability to decide points of religious 
conduct, act as leaders of their community in matters concern- 



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Iran: A Country Study 



ing the particulars of religious duties. Lay Shias and lesser 
members of the clergy who lack such proficiency are expected 
to follow a mujtahid in all matters pertaining to religion, but 
each believer is free to follow any mujtahid he or she chooses. 
Since the mid-nineteenth century, it has been common for sev- 
eral mujtahids concurrently to attain prominence and to attract 
large followings. During the twentieth century, such mujtahids 
were accorded the title of ayatollah. Occasionally, an ayatollah 
achieves almost universal authority among Shias and is given 
the title of ayatollah ol ozma, or grand ayatollah. Such authority 
was attained by as many as seven mujtahids simultaneously, 
including Ayatollah Khomeini, in the late 1970s. 

To become a mujtahid, it is necessary to complete a rigorous 
and lengthy course of religious studies in a prestigious 
madrassa of Qom or Mashhad in Iran or An Najaf in Iraq and 
to receive an authorization from a qualified ayatollah. Of equal 
importance is either the explicit or tacit recognition of a cleric 
as a mujtahid by laymen and scholars in the Shia community. 
Most seminary students actually leave the madrassa after com- 
pleting the primary level. They then can serve as prayer lead- 
ers, village mullahs, local shrine administrators, and other 
religious functionaries. Those who leave after completing the 
second level become preachers in town and city mosques. Stu- 
dents at the third level of study are those preparing to become 
mujtahids. 

Unorthodox Shia Religious Movements 

Sufism, or Islamic mysticism, has a long tradition in Iran. It 
developed there and in other areas of the Islamic empire dur- 
ing the ninth century among Muslims who believed that 
worldly pleasures distracted from true concern with the salva- 
tion of the soul. Sufis generally renounced materialism, which 
they believed supported and perpetuated political tyranny. 
Their name is derived from the Arabic word for wool, suf, and 
was applied to the early Sufis because of their habit of wearing 
rough wool next to their skin as a symbol of their asceticism. 
Over time various Sufi brotherhoods were formed, among 
them several militaristic orders such as the Safavis. 

Although Sufis were associated with the early spread of Shia 
ideas in Iran, once the Shia clergy had consolidated authority 
over religion, by the early seventeenth century they tended to 
regard Sufis as deviant. Despite occasional persecution by the 
Shia clergy, Sufi orders continue to exist in Iran. During the 



126 



The Society and Its Environment 



Pahlavi period, Sufi brotherhoods were revitalized as some 
members of the secular middle class were attracted to them. 
However, the orders appear to have had little lower-class follow- 
ing. The largest Sufi order is the Nimatollahi, which has teach- 
ing centers in several cities and has even established new 
centers in foreign countries. Sufi brotherhoods such as the 
Naqshbandi and the Qadiri also exist among Sunni Muslims in 
Kurdistan. There is no evidence of persecution of Sufis since 
the Revolution, but because individual political leaders and 
clergy in the governments of the Islamic Republic have 
regarded Sufi brotherhoods suspiciously, these groups have 
tended to keep a low profile. 

Some Shia sects present in Iran are regarded as heretical by 
Twelver Shia clergy. The Ismailis have several thousand adher- 
ents in northeastern Iran and several million outside the coun- 
try. The Ismailis trace their origins to the son of Ismail, who 
predeceased his father, the Sixth Imam. Very numerous and 
active in Iran from the eleventh to the thirteenth centuries, the 
Ismailis were forced into hiding by the Mongols. In the nine- 
teenth century, their leader, the Agha Khan, fled to British-con- 
trolled India, where he supervised the revitalization of the sect. 

Members of another Shia sect, the Ahl-e Haqq, are concen- 
trated in Kurdish areas, especially the Kermanshah region. 
Smaller communities live in the provinces of East and West 
Azerbaijan, Luristan, Mazandaran, and in Tehran. The Ahl-e 
Haqq are believed to have originated in one of the medieval 
politicized Sufi orders. Although the Ahl-e Haqq generally 
revere the Twelve Imams, they do not observe many fundamen- 
tal Islamic practices. Some orthodox Shias and Sunnis consider 
this sect heretical, and its members have been persecuted spo- 
radically in the past. Immediately after the Revolution, some of 
the sect's leaders were imprisoned on the grounds of religious 
deviance, but since the late 1980s the government has not 
interfered with Ahl-e Haqq activities. 

Sunni Muslims 

Sunni Muslims constitute approximately 8 percent of the Ira- 
nian population. An estimated 40 percent of Iranian Kurds, vir- 
tually all Baluchis and Turkmens in Iran, and a minority of 
Iranian Arabs are Sunnis. There also are small communities of 
Persian-speaking Sunnis in the Lar region of southern Iran and 
in the provinces of North, Razavi, and South Khorasan. Gener- 
ally speaking, Iranian Shias are inclined to recognize Sunnis as 



127 



Iran: A Country Study 



fellow Muslims whose religion is incomplete because they do 
not accept the doctrine of the Imamate. Shia clergy tend to 
ascribe value to missionary work to convert Sunnis to what 
Shias regard as true Islam. Because the Sunnis generally live in 
the border regions of the country, there has been limited Shia- 
Sunni tension or conflict in most of Iran. In towns with mixed 
populations in West Azerbaijan, the Persian Gulf region, and 
Sistan va Baluchistan, however, tensions between Shias and 
Sunnis have existed both before and after the Revolution. Reli- 
gious tensions tend to be highest during major Shia obser- 
vances, especially Moharram. Because most Sunnis are 
members of ethnic minorities, religious and ethnic identities 
sometimes become fused. This combination has fueled com- 
plaints of discrimination, especially among some Sunni Kurds 
and Sunni Baluchis. 

Non-Muslim Minorities 

Christians 

Beginning in the twentieth century, Christians generally 
have been permitted to participate in the economic and social 
life of the country. Iran's indigenous Christians include an esti- 
mated 300,000 Armenians, some 32,000 Assyrians, and a small 
number of Iranians who have converted to Roman Catholicism 
and Protestant sects or who are the descendants of Iranians 
who converted to those religions in the nineteenth and twenti- 
eth centuries (see table 5, Appendix). The Armenians are pre- 
dominantly urban and are concentrated in Tehran and 
Esfahan; smaller communities reside in Tabriz, Arak, and other 
cities. A majority of the Assyrians are also urban, although 
there are still several Assyrian villages in the Lake Urmia 
region. Although the Armenians and the Assyrians have 
encountered individual prejudice, they have not been sub- 
jected to persecution. The Armenians, especially, have 
achieved a relatively high standard of living and maintain sev- 
eral parochial primary and secondary schools. 

The constitution of 1979 recognized the Armenians and 
Assyrians as official religious minorities. Armenians are entitled 
to elect two representatives to the Majlis and Assyrians, one. 
Both groups are permitted to follow their own religious laws in 
matters of marriage, divorce, and inheritance. Other Christians 
have not received any special recognition, and some Iranian 
Anglicans and Evangelicals have been persecuted. All Chris- 



128 



The Armenian Vank Church in the Jolfa quarter of Esfahan 

Courtesy Nader Davoodi 



tians are required to observe the laws relating to attire and gen- 
der segregation in public gatherings. However, Christians are 
permitted to make wine for use in religious services. Tensions 
have existed between the government and Armenians over the 
administration of the Armenian schools. The Ministry of Edu- 
cation insisted for a decade after the Revolution that the princi- 
pals of these schools be Muslims, that courses on Islam be 
required in the curricula, that other religion courses be taught 
in Persian, and that all female students observe hejab inside the 
schools. Government supervision gradually lessened during the 
1990s, although in the early 2000s Armenian schools still 
taught an approved course on Islam. 

Baha'is 

Although the Baha'is are Iran's second-largest non-Muslim 
minority, they do not enjoy constitutional protection as an offi- 
cial religious minority. There were an estimated 250,000 
Baha'is in Iran in 2005 according to Iranian figures, but other 
estimates are as high as 350,000. The Baha'is are scattered in 
small communities throughout Iran, with heavy concentrations 
in larger cities. Most Baha'is are urban, but there are some 



129 



Iran: A Country Study 



Baha'i villages. The majority of Baha'is are Persians, but there 
is a significant minority of Azerbaijani Baha'is, and Baha'is also 
are represented in other ethnic groups in Iran. 

The Baha'i faith originated in Iran in the mid-1 800s, based 
on the teachings of Mirza Ali Muhammad and his disciple, 
Mirza Hussein Ali Nur, or Baha'u'llah, the faith's prophet- 
founder. It initially attracted a wide following among dissident 
Shia clergy and others dissatisfied with society, but since its 
inception it has met with intense hostility from mainstream 
Shia clergy. Upholding many teachings of Islam and other 
world religions, the faith stresses the brotherhood of all peo- 
ples, the eradication of all forms of prejudice, and the estab- 
lishment of world peace. By the early twentieth century, the 
faith had spread to North America, Europe, and Africa. 

Because the Shia clergy, like many other Iranians, continued 
to regard their faith as heretical, Baha'is in Iran have encoun- 
tered much prejudice and sometimes even persecution. Their 
situation generally improved under the Pahlavi shahs, as the 
government sought to secularize public life. Baha'is were per- 
mitted to hold government posts and allowed to open their 
own schools, and many were successful in business and the pro- 
fessions. The faith expanded significantly in the 1960s. How- 
ever, major instances of discrimination occurred in 1955 and 
1978, and the faith's status changed drastically in 1979. The 
Islamic Republic did not recognize the Baha'is as a religious 
minority, and adherents to the faith were officially persecuted. 
More than 1,000 Baha'is were imprisoned and several hundred 
killed. Most privileges of citizenship were revoked. Several 
thousand Baha'is fled the country during the 1980s. Their situ- 
ation improved marginally during the 1990s. However, in the 
early 2000s the United Nations Commission on Human Rights 
reported that Baha'is faced restrictions in employment, educa- 
tion, and the practice of their religion. Media condemnation of 
the faith became more frequent in 2005, and Baha'is continue 
to be subject to arbitrary arrest and imprisonment. 

Zoroastrians 

In the early 2000s, there were an estimated 32,000 Zoroastri- 
ans in Iran. The Zoroastrians speak Persian and are concen- 
trated in Tehran, Kerman, and Yazd provinces. Zoroastrianism 
initially developed in Iran during the seventh century B.C. 
Later, it became the official religion of the Sassanian dynasty, 
which ruled Iran for approximately four centuries before being 



130 



The Society and Its Environment 



destroyed by the Arabs in the seventh century A.D. (see The 
Sassanians, A.D. 224-642, ch. 1). With Iran's incorporation 
into the Islamic empire, the majority of the Iranian population 
had converted from Zoroastrianism to Islam by the mid-tenth 
century. 

During the Qajar dynasty, there was considerable prejudice 
against Zoroastrians. In the mid-nineteenth century, several 
thousand Zoroastrians emigrated from Iran to British-ruled 
India to improve their economic and social status. Many even- 
tually acquired wealth in India and subsequently expended 
part of their fortunes on upgrading conditions in the Zoroas- 
trian communities of Iran. The emphasis placed on Iran's pre- 
Islamic heritage by the Pahlavis also helped Zoroastrians 
achieve a more respected position in society. Many of them 
migrated from Kerman and Yazd to Tehran, where they accu- 
mulated significant wealth as merchants and in real estate. By 
the 1970s, younger Zoroastrians were entering the professions. 

The Zoroastrians, like the Christians and Jews, are recog- 
nized as an official religious minority under the 1979 constitu- 
tion. The constitution permits the Zoroastrians to elect one 
representative to the Majlis, and, like the other "legal" minori- 
ties, they may seek employment in the government. They main- 
tain houses of worship, known as fire temples, and their own 
cemeteries. They generally enjoy the same civil liberties as Mus- 
lims. As a group, Zoroastrians have not been singled out for dis- 
crimination or persecution because of their religious beliefs. 

Jews 

In the early 2000s, there were an estimated 25,000 to 30,000 
Jews in Iran, a decline from about 85,000 in 1978. The Iranian 
Jewish community is one of the oldest in the world, being 
descended from Jews who remained in the region following the 
Babylonian captivity, when the Achaemenian rulers of the first 
Iranian empire permitted Jews to return to Jerusalem (see The 
Achaemenian Empire, 550-330 B.C., ch. 1). Over the centu- 
ries, the Jews of Iran became physically, culturally, and linguisti- 
cally indistinguishable from the non-Jewish population. The 
overwhelming majority of Jews speak Persian as their primary 
language. Iran's Jews are predominantly urban; by the 1970s, 
they were concentrated in Tehran, with smaller communities in 
other cities such as Shiraz, Esfahan, Hamadan, and Kashan. 

Until the twentieth century, Jews were confined to their own 
quarters in the towns. In general, they were an impoverished, 



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Iran: A Country Study 

occupationally restricted minority. Since the 1920s, Jews have 
had greater opportunities for economic and social mobility. 
They gradually gained increased prominence in the bazaars, 
and after World War II some educated Jews entered the profes- 
sions. The Jews' legal position did not change as a result of the 
Revolution, and the constitution of 1979 recognized Jews as an 
official religious minority with the right to elect a representa- 
tive to the Majlis. Like the Christians, the Jews generally have 
not been persecuted. They have maintained numerous syna- 
gogues, cemeteries, and private schools. In practice, however, 
the situation of the Jewish community has been affected by the 
intense hostility between Iran and Israel. The Islamic Republic 
does not recognize Israel and officially condemns Zionism, the 
ideology of Israel, as a racist creed justifying the occupation of 
a Muslim holy land, Palestine. Since the creation of Israel in 
1948, about 45,000 Iranian Jews have emigrated there, and 
many Jews in Iran keep in regular contact with relatives in 
Israel. Although the leaders of Iran's Jewish community insist 
that no Iranian Jews subscribe to Zionism, the ties between Ira- 
nian Jews and their relatives in Israel have been used against 
them. These individual cases have not affected the status of the 
community as a whole, but they have contributed to a pervasive 
feeling of insecurity among Jews and have helped precipitate 
large-scale emigration. 

Education 

Prior to the mid-nineteenth century, education was associ- 
ated with religious institutions. The clergy, both Muslim and 
non-Muslim, assumed responsibility for instructing youth in 
basic literacy and the fundamentals of religion. Knowledge of 
reading and writing was not considered necessary for all the 
population, and thus education generally was restricted to the 
sons of the economic and political elite. Typically, this involved 
a few years of study in a local school, or maktab. Those who 
desired to acquire more advanced knowledge could continue 
in a religious college, or madrassa, where all fields of religious 
science were taught. A perceived need to provide instruction in 
subjects that were not part of the traditional religious curricu- 
lum, such as accounting, European languages, military science, 
and technology, led to the establishment of the first govern- 
ment school in 1851. By the early twentieth century, several 
schools, including a few for girls, taught foreign languages and 



132 



Boys posing in a grocery store 
Courtesy Nader Davoodi 



sciences. These schools were run by foreign missionaries, pri- 
vate Iranians, and the government. Their function was to edu- 
cate the children of the elite. During the Constitutional 
Revolution (1905-7), a number of reform-minded individuals 
proposed the establishment of a nationwide, public, primary 
school system (see The Constitutional Revolution, ch. 1). 
Progress in opening new schools was steady but slow, and by 
the end of the Qajar dynasty (1925) approximately 3,300 gov- 
ernment schools were operating, with a total enrollment of 
about 110,000 students. 

During the Pahlavi era (1925-79), the imperial government 
expanded the education system. Given responsibility for regu- 
lating all public and private schools, the Ministry of Education 
drafted a uniform curriculum for primary and secondary edu- 
cation. This entire public system was secular and was based on 
the French model. Its objective was to train Iranians for mod- 
ern occupations in administration, management, science, and 
teaching. Although this education system was the single most 
important factor in the creation of the secular middle class, the 
goal of creating a nationwide education system was never 
achieved during the Pahlavi era. In 1940 only 10 percent of all 
elementary-age children were enrolled in school, and less than 



133 



Iran: A Country Study 



1 percent of youths between the ages of 12 and 20 were in sec- 
ondary school. These statistics did not change significantly 
until the early 1960s, when the government initiated programs 
to improve and expand the public school system. By 1978 
approximately 75 percent of all elementary-age children were 
enrolled in primary schools, but fewer than half of teenagers 
were attending secondary schools. 

Although by the 1920s the country had several institutes of 
higher education, modern college and university education 
developed under the Pahlavis. In 1934 the institutes associated 
with government ministries were combined to form the Univer- 
sity of Tehran, which was coeducational from its inception. Fol- 
lowing World War II, universities were founded in other major 
cities such as Tabriz, Esfahan, Mashhad, Shiraz, and Ahvaz. 
During the 1970s, these universities were expanded, and col- 
leges and vocational institutes were set up in several cities. 

One of the first measures adopted by the government after 
the Revolution was to "purify" the public school system of 
teachers deemed "counterrevolutionary" and of texts deemed 
antireligious. However, excepting the introduction of religion 
as a required class in the public school curriculum, the basic 
organization of the education system was not altered. Thus, stu- 
dents continued to attend primary school for five years, begin- 
ning in the first grade at age six. Then they spent three years in 
middle school. In high school, students aspiring to go on to 
college enrolled in humanities or science and mathematics 
programs; others enrolled in vocational programs. Students 
who completed the three-year cycle of the first two programs 
attended a fourth year of college preparatory classes. 

The Ministry of Education announced that nearly 15 million 
students registered for elementary and secondary schools in 
September 2004. At the primary level, 97.8 percent of children 
ages six to 1 1 were enrolled. Attendance at secondary school is 
not compulsory, and consequently students begin to drop out 
as they reach their teen years. Nevertheless, in 2004 some 90 
percent of children ages 12 to 14 were enrolled in middle 
school, and 70 percent of adolescents ages 15 to 18 years were 
enrolled in high schools. Girls and boys were entrolled in 
approximately equal numbers at the primary level; in 2004 girls 
made up 49 percent of middle-school students and 48 percent 
of high-school students. 

In April 1980, the government closed the universities, most 
of which had become centers for political demonstrations by 



134 



The Society and Its Environment 



both opponents and supporters of the revolutionary regime. 
Over the following two and one-half years, the universities were 
purged of "counterrevolutionary" faculty, and courses in some 
disciplines of the humanities were redesigned to better reflect 
the worldview of the Islamic Republic. Once the universities 
were reopened, they expanded rapidly in response to the rising 
demand for college education. By 2004, more than 200 public 
and 30 private institutions of higher education were dispersed 
throughout the country, enrolling a total of nearly 1.6 million 
students. The largest and most prestigious public university is 
the University of Tehran, which has enrolled a student body of 
about 32,000 graduates and undergraduates annually since 
1998. Collectively, the university and 115 other major public 
institutions of higher education in Tehran enrolled more than 
95,000 students in 2004. All of Iran's other major cities also 
have public universities. A popular experimental public univer- 
sity, Payam-e Nur, was established in 1987 to provide off-campus 
learning for working adults who wanted to complete under- 
graduate and graduate degrees by taking evening classes on 
flexible schedules. Payam-e Nur, which charges tuition, and the 
other, tuition-free, public colleges and universities collectively 
enrolled more than 550,000 students in 2004. The private sys- 
tem of higher education is dominated by the Islamic Free Uni- 
versity, whose branches in 110 cities and towns enrolled more 
than 700,000 students in 2004. Some 33 other private colleges 
offering specialty degrees collectively enrolled more than 
23,000 students in 2004. Of the country's total postsecondary 
student population in 2004, about 57 percent were females and 
43 percent males. University male and female students are seg- 
regated by rows in classes, and in 2006 authorities sought to 
establish separate classes. 

In 2003 Iran's overall literacy rate was 79.4 percent. The lit- 
eracy rate by gender was 85.6 percent for males and 73 percent 
for females. 

Health and Welfare 

After the 1978-79 Revolution, one major faction, referred to 
as "radicals" in the early 1980s, then as "moderates" in the mid- 
1980s to early 1990s, and subsequently as "reformers," held that 
government ought to help the poor rise out of poverty by pro- 
viding subsidies for basic foods and utilities and financial assis- 
tance to families with no regular income. This faction also felt 
that it was inappropriate for the government to monitor the 



135 



Iran: A Country Study 



private or public behavior of its citizens. The conservative fac- 
tion, in contrast, preferred private charitable efforts over pub- 
lic assistance as the means of helping the needy and thus 
encouraged religious institutions, especially mosques, to get 
more involved in social welfare programs. The conservatives' 
policies significantly enhanced the role of the mosque in soci- 
ety. However, while the radical/moderate faction dominated 
the Majlis from 1980 until 1992, it greatly expanded govern- 
mental health and welfare services, with particular emphasis on 
providing services for low-income populations in both rural 
and urban areas. The implementation of a relatively compre- 
hensive national health insurance program, the construction 
of a network of nationwide primary health care clinics, and the 
subsidization of the cost of many common medical drugs all 
have been factors in a dramatic improvement in the general 
health of the population. Health indicators as of 2007 showed 
that average life expectancy had increased to 72.1 years for 
women and 69.1 years for men; the crude birthrate was 16.6 
per 1,000 population; the crude death rate was 5.6 per 1,000 
population. 

Iran has a voluntary national health insurance program that 
delivers primary health care to more than 65 percent of the 
population. Individuals and families may enroll by paying a 
monthly fee; several levels of coverage, correlated to the 
amount of the monthly fee, are available. The Imam Khomeini 
Relief Committee and other charitable foundations pay the 
basic monthly enrollment fee for poor families; most factory 
workers and government employees pay through payroll 
deductions. The program covers routine health care services, 
including doctors' visits, but those who require specialized 
medical procedures generally must cover a portion of the costs. 
Private health insurance plans also are available; self-employed 
persons and those with the financial means generally prefer to 
enroll in private health plans and also use private hospitals and 
clinics. 

Medical Personnel and Facilities 

According to the Iranian Medical Association (IMA), an esti- 
mated 7,000 physicians — 40 percent of medical doctors in 
Iran — emigrated during and immediately after the Revolution. 
This situation contributed to a critical shortage of medical per- 
sonnel that lasted through the 1980s. The Ministry of Health 
sought to remedy this shortage by hiring doctors from other 



136 



The Society and Its Environment 



Asian countries, a practice that continued until the early 1990s, 
and by expanding medical education facilities. By the early 
2000s, Iran's nine major medical colleges were awarding more 
than 1 ,500 doctor of medicine degrees annually. The IMA had 
about 67,000 members, of whom 62,300 were practicing physi- 
cians and about 4,700 were dentists. On average, there were 0.9 
physicians per 1,000 population. The IMA estimated that 46 
percent of physicians were women, as were 38 percent of den- 
tists. Nurses of all skill levels numbered more than 100,000; 
about 50 percent were women. There were 650 hospitals 
throughout the country, with a total of 73,700 beds, or an aver- 
age of 1.1 hospital beds per 1,000 population. 

The medical colleges provide free education for students 
who agree to practice for a stipulated number of years in small- 
town and rural clinics after obtaining their degree. This 
requirement has enabled the Ministry of Health to make pri- 
mary health care generally available in rural areas. However, 
specialized health care services, including most surgical proce- 
dures, tend to be concentrated in Tehran and other large cit- 
ies. Public facilities tend to have inadequate staff and 
equipment to treat special cases. This situation has contributed 
to a widespread popular perception that private clinics provide 
better care, although most private physicians also practice at 
public facilities. 

Health Hazards and Preventative Medicine 

For at least 100 years prior to the 1980s, the chief causes of 
death, apart from infant mortality, were gastrointestinal, respi- 
ratory, and parasitic diseases. However, with the gradual 
improvement of health in urban areas by the 1960s, the relative 
rate of deaths from cancer, diabetes, and heart disease began to 
increase. Contagious diseases, such as grippe and influenza, 
conjunctivitis, scarlet fever, whooping cough, pulmonary tuber- 
culosis, and typhoid fever also were common. The improve- 
ment in overall health care after the Revolution led to dramatic 
declines in infant mortality and deaths from diseases and infec- 
tions that can be cured with antibiotics. The infant mortality 
rate in 2006 was 40.3 deaths per 1,000 live births, and the 
maternal mortality rate was one in 370 births. The Ministry of 
Health has instituted preventive programs to inoculate pri- 
mary- school-age children against diphtheria, measles, pertus- 
sis, poliomyelitis, and other diseases. Following earthquakes 
and other natural disasters, medical response measures, includ- 



137 



Iran: A Country Study 

ing mass immunizations to prevent epidemics, have been rela- 
tively effective. 

Illicit drug use has become a serious national health prob- 
lem. In 2004 the Ministry of Health estimated that there were 
as many as 3 million drug addicts in a total adult population of 
40 million. Opium is the most commonly used drug. The Shia 
clergy have tried to discourage opium use by declaring it reli- 
giously prohibited. Although the production, sale, and con- 
sumption of opium are illegal, an estimated 20 percent of 
males over age 18 are believed to use it at least occasionally. 
Users typically consume opium by smoking it, but since the late 
1990s illegal processing laboratories have been extracting her- 
oin from opium, and dealers have been selling it for intrave- 
nous injection. By 2002 the use of heroin may have surpassed 
opium use in Tehran and other large cities among males ages 
18 to 25. The Ministry of Health operates a network of free 
drug rehabilitation centers in Tehran and other large cities. 
These facilities do not keep records on patients after they have 
been discharged, however, so it has not been possible to assess 
their long-term effectiveness. 

Initially, the primary means of human immunodeficiency 
virus (HIV) infection was the transfusion of blood imported 
from Europe before HIV testing had become routine. Since 
the late 1990s, however, intravenous drug injection is the main 
source of HIV, accounting for 65 percent of new cases in Iran. 
The overall incidence of acquired immune deficiency syn- 
drome (AIDS) has been very low. In 2005 the Ministry of 
Health estimated that about 9,800 Iranians were infected with 
the HIV virus. In the early 2000s, Iran established a national 
HIV treatment program, including voluntary treatment centers 
and a needle exchange system. 

Another health hazard, especially in Tehran but increasingly 
in several other large cities, is air pollution, which has been 
linked to respiratory diseases, aggravated coronary conditions, 
and certain cancers, among other health problems (see Envi- 
ronment, this ch.). 

Water Supply and Sanitation 

All of Iran's urban areas and at least 95 percent of its villages 
had safe, piped drinking water by the end of the 1990s. Access 
to clean water reduced the once high incidence of waterborne 
gastrointestinal diseases to relatively insignificant levels. Munic- 
ipal sewerage systems have been established in cities, and the 



138 



The Society and Its Environment 



use of septic tanks has become common in villages (see Envi- 
ronment, this ch.). 

Welfare 

In 2005 the absolute poverty line was estimated at US$140 of 
income per month. Evaluations of poverty distribution have 
varied widely; according to a parliamentary report, 20 percent 
of the urban population and 50 percent of the rural popula- 
tion were living in poverty in 2004. This marks a significant 
decrease compared with the 1996 figure of 53 percent overall. 

Religious and social traditions have influenced attitudes 
toward welfare. Most Iranians feel obligated to help the needy 
in accordance with religious tenets such as the giving of alms 
(zakat), which is one of the obligations of the Islamic faith. 
Since the Revolution, the regime has espoused an ideological 
commitment to assisting the less fortunate, or mostazaftn, the 
social group that had been neglected to a considerable degree 
under the shah. The largest charity in the country, the Bonyad- 
e Mostazafm (Foundation of the Disinherited) , was established 
by the last shah as the Pahlavi Foundation to fund a variety of 
charitable programs. After the Revolution, the government 
took over its administration, renamed it, and redesigned its 
programs to emphasize assistance to poor families. Although 
this foundation and three smaller charitable ones may be con- 
sidered semipublic because their directors are appointed by 
the Leader, no governmental body reviews their income 
sources or expenditures (see The Leader, or Faqih, ch. 4). The 
Bonyad-e Mostazafm undertakes a great variety of income-earn- 
ing and grant-giving activities; one of its major charitable 
projects has been the construction of low-income housing for 
the poor, especially in Tehran and its suburbs. Another founda- 
tion, the Imam Khomeini Relief Committee, provides various 
kinds of assistance to the families of "martyrs," that is, those 
killed during the Revolution or the war with Iraq, and victims 
of natural disasters. 

Aside from national health insurance, the most important 
form of government assistance is a pension program that is par- 
tially funded by employee contributions. The first public retire- 
ment program, set up during the Pahlavi era, initially benefited 
only government employees. Although it was extended gradu- 
ally, by the time of the Revolution less than 10 percent of the 
total workforce was covered. During the 1980s, the Islamic 
Republic gradually extended coverage to all employed persons, 



139 



Iran: A Country Study 

and in the 1990s all self-employed farmers also were covered. 
Female government employees may retire after 20 years of 
work, their male counterparts after 25 years; in other employ- 
ment sectors, women may collect pensions as early as age 45 
and all workers by age 60, depending on the number of years 
worked. Other forms of social welfare benefits, such as disabil- 
ity, widows' pensions, and payments for minor children of 
deceased heads of households, generally are provided by the 
Imam Khomeini Relief Committee and other semipublic foun- 
dations. 

In 2005 unemployment insurance payments to eligible work- 
ers ranged from about US$140 to US$440 per month, but only 
about 131,000 unemployed workers received payments. 
Depending on family status and the insurance payments made 
by the worker, the program provides between six and 50 
months of coverage. 



* * * 



With respect to geography, Volume 1 of the Cambridge History 
of Iran, The Land of Iran, edited by W. B. Fisher, remains the 
most authoritative source for comprehensive articles about 
Iran's climate, environment, hydrology, mineralogy, and topog- 
raphy. On population, the Statistical Center of Iran is an indis- 
pensable resource for recent and historical census data; 
English summaries of its reports and latest statistics are avail- 
able on its own and other government Web sites listed in the 
Bibliography. Iran's diverse languages and ethnic groups are 
the subjects of numerous useful books and articles, including 
Amir Hassanpour's Nationalism and Language in Kurdistan, 
1918-1985, Sekandar Amanolahi's "The Lurs of Iran," Lois 
Beck's The Qashqa'i of Iran and Nomad, Brian Spooner's "Ba- 
luchestan," and Philip Salzman's Black Tents of Baluchistan. 

Although many books in Persian and French analyze social 
change in Iran since the Revolution, there is no equivalent text 
in English. Fariba Adelkhah's Being Modern in Iran, although 
not comprehensive, does provide insights into selected aspects 
of contemporary Iranian society from a cultural-anthropologi- 
cal perspective. Twenty Years of Islamic Revolution, edited by Eric 
Hooglund, is a collection of articles that examine social change 
relating to women, youth, and rural society. A special issue of 



140 



The Society and Its Environment 



the journal Critique, "Sociological Research in Iran," also edited 
by Hooglund, provides valuable statistical data on changes 
affecting these and other social groups. 

Insight into the social structure of urban Iran is provided by 
Azadeh Kian-Thiebaut in Secularization of Iran: A Doomed Failure! 
On the urban poor, see Assef Bayat's Street Politics. On the social 
structure of rural Iran, see Eric Hooglund's Land and Revolution 
in Iran, 1960-1980 and Ali Shakoori's The State and Rural Devel- 
opment in Post-Revolutionary Iran. Books that are particularly 
valuable on women in Iran include Parvin Paydar's Women and 
the Political Process in Twentieth Century Iran, Mahnaz Kousha's 
Voices from Iran, Ziba Mir-Hosseini's Islam and Gender, and Fae- 
gheh Shirazi's The Veil Unveiled. Among the scores of articles 
about specific issues pertaining to women, those by Roksana 
Bahramitash, Homa Hoodfar, Azadeh Kian-Thiebaut, Ziba Mir- 
Hosseini, and Jaleh Shaditalab are especially useful. 

On religion, Moojan Momen's An Introduction to Shi'i Islam is 
a comprehensive survey of the history, beliefs, and practices of 
Twelve Imam Shiism and contains information about all other 
Shia sects as well. It is an excellent reference for those with lit- 
tle or no prior knowledge about this denomination. For a more 
detailed analysis of Islam in Iran, Alessandro Bausani's Religion 
in Iran generally is considered the classic study. On non-Muslim 
minorities, see the Encyclopedia Iranica entries "Armenians of 
Modern Iran" (by Amurian and Kasheff) and "Assyrians in 
Iran" (by Rudolf Macuch) , and Janet Kestenberg-Amighi's 
book The Zoroastrians of Iran. (For further information and 
complete citations, see Bibliography.) 



141 



Chapter 3. The Economy 




A ninth-century ceramic plate from Neyshabur 



SEVERAL MAJOR CHARACTERISTICS of the Iranian econ- 
omy have remained remarkably untouched over the past cen- 
tury despite dramatic differences in the social and political 
structures of each of the three regimes (Qajar, Pahlavi, and 
Islamic) that ruled the country during this period. Each regime 
identified a relationship between the economic structure and 
the roots of the social, political, and economic problems of the 
country. Each regime also introduced its own socioeconomic 
agenda and claimed to bring about necessary structural 
changes, but all three failed to achieve significant change in 
the economy's structure. This is particularly evident in the 
comparison of the structure of the Iranian economy before 
and after the 1978-79 Revolution. 

Iran's postrevolutionary economy retains several continuities 
with the prerevolutionary economy. Oil revenues remain the 
main source of government income, as they have been since 
the 1950s. In part because of oil's central role, the government 
has remained a dominant force in shaping the composition of 
national output, as well as its production and distribution. The 
public sector dominates the economic scene, and the subordi- 
nation of the private sector is observed in all industries and 
commerce. Since 1948, with some disruptions, government 
development planning has implemented economic projects 
and budget outlays. Many government projects require multi- 
year budget planning. The budgetary process, the format of 
the annual budget, and the role of oil revenues in this process 
have remained the same over time. 

Public-sector investments in transportation (highways and 
railroads), utilities, telecommunications, and other infrastruc- 
ture have grown over time. Although infrastructure invest- 
ments have had different impacts on rural and urban 
development over the period, government infrastructure 
investments have been one of the distinctive common features 
of pre- and postrevolutionary Iran. Similarly, the share of inter- 
national trade in the economy has grown over time but without 
a significant change in structure. On the export side, Iran 
remains a major oil exporter, with some manufactured exports 
such as rugs and minimally processed items such as dried fruits. 
On the import side, Iran has remained an importer of raw 



145 



Iran: A Country Study 



materials and spare parts, food and medicine, manufactured 
goods, and military equipment. 

Historical Background 

The Economy under the Pahlavis, 1925-79 

Reza Shah Pahlavi (r. 1925-41) improved the country's over- 
all infrastructure, implemented educational reform, cam- 
paigned against foreign influence, reformed the legal system, 
and introduced modern industries. During this time, Iran 
experienced a period of social change, economic develop- 
ment, and relative political stability. 

In the interwar period, modern industries were introduced. 
Whereas fewer than 20 modern industrial plants existed in 
1925, by 1941 more than 800 new plants had been established, 
with the intention of reducing the country's dependence on 
imports. The state encouraged industrialization by raising tar- 
iffs, financing modern industries, and imposing government 
monopolies. Changes in the legal system, tax structure, and 
trade policies attracted domestic financial resources and led to 
the emergence of a group of new, young entrepreneurs. The 
shah's court became the biggest investor in the new industries. 
Primarily by confiscating real estate, the shah himself became 
the country's richest man. Increased investment in mining, 
construction, and the manufacturing sector occurred, and 
infrastructure investment grew significantly. Iran had only 250 
kilometers of railroads and 2,400 kilometers of gravel roads in 
1925; by 1938 these totals had increased to 1,700 and 12,000 
kilometers, respectively. Industrial growth was not balanced, 
however. Integration among sectors and industries was absent, 
and the new industries met only part of the growing domestic 
demand. Agriculture, from which 90 percent of the labor force 
made its living, did not benefit from economic reform. Fur- 
thermore, the expanding areas of the economy were not labor- 
intensive. Modern sectors (Caspian Sea fisheries, railroads, sea- 
ports, the oil industry, modern factories, and coal fields) 
absorbed a total of only about 170,000 workers, less than 4 per- 
cent of the labor force. 

The government managed the expansion of international 
trade by techniques such as the foreign-exchange controls 
imposed in 1936. Many new items were among the imported 
goods required by industry, the military, railroads, and other 
areas of infrastructure investment. Traditional agricultural and 



146 



The Economy 



industrial export products were replaced by oil exports. Ger- 
many became Iran's primary trading partner by 1940, account- 
ing for 42 percent of its foreign trade; the United States was 
second, with 23 percent. The Soviet Union also was a major 
trading partner in this period. Despite many advances in 
domestic and foreign economic policy, however, Iran remained 
an exporter of raw materials and traditional goods and an 
importer of both consumer and capital goods in the years 
before World War II. 

Reza Shah Pahlavi, who abdicated in 1941, was succeeded by 
his son, Mohammad Reza Shah Pahlavi (r. 1941-79). No funda- 
mental change occurred in the Iranian economy during World 
War II (1939-45) and the years immediately following. How- 
ever, between 1954 and 1960 a rapid increase in oil revenues 
and sustained foreign aid led to greater investment and fast- 
paced economic growth, primarily in the government sector. 
Subsequently, inflation increased, the value of the national cur- 
rency (the rial — see Glossary) depreciated, and a foreign-trade 
deficit developed. Economic policies implemented to combat 
these problems led to declines in the rates of nominal eco- 
nomic growth and per capita income by 1961. 

In response to these setbacks, Iran initiated its third eco- 
nomic development plan (1962-68; see Glossary) with an 
emphasis on industrialization. New economic policies signifi- 
cantly altered the role of the private sector. The expansion of 
private and public banks, as well as the establishment of two 
specialized banks, provided reliable credit markets for 
medium- and large-scale private manufacturing enterprises. 
Not limited to cheap credit, government programs also 
included a wide range of incentives to encourage investment in 
new industries by both Iranian and foreign businesses. Most 
new investment was a joint effort between either the public sec- 
tor and foreign investors or private businesses and foreign cor- 
porations. Investment in roads, highways, dams, bridges, and 
seaports also increased. With government support, part of the 
agricultural sector also attracted significant investment. Many 
large-scale agricultural operations in meat, dairy products, and 
fruit production were established. Small-scale farmers, how- 
ever, did not benefit from the new investment opportunities. 

Under the fourth and the fifth economic development plans 
(1968-73; 1973-78), the Iranian economy became increasingly 
open to imports and foreign investment. A combination of oil 
revenues, public spending, and foreign and domestic invest- 



147 



Iran: A Country Study 



ments enlarged the middle class in major cities, particularly 
Tehran. In the wake of the spike in crude oil prices that fol- 
lowed the 1973 war pitting Egypt and Syria against Israel, the 
process of industrialization and consumption grew rapidly. 
Between 1973 and 1977, the specialized banks provided more 
than 200 billion rials to the manufacturing sector, and the 
increase in investment averaged 56 percent per year. A flood of 
imported goods and raw materials overwhelmed the capacitv of 
seaports and warehouses. The military was also a beneficiary of 
the new economic and social conditions. Military personnel, 
modern artillery and equipment, and military training 
absorbed a major part of the budget. 

Between fiscal year (FY — see Glossary) 1964 and FY 1978, 
Iran's gross national product (GNP — see Glossary) grew at an 
annual rate of 13.2 percent at constant prices. The oil, gas, and 
construction industries expanded by almost 500 percent dur- 
ing this period, while the share of value-added manufacturing 
increased by 4 percent. Women's participation in the labor 
force in urban areas increased. Large numbers of urban Ira- 
nian women, from varying social strata, joined the semiskilled 
and skilled labor forces (see Female Participation in the Work- 
force, ch. 2). In addition, the number of women enrolling in 
higher education increased from 5,000 in FY 1967 to more 
than 74,000 in FY 1978. 

Economic growth, however, became increasingly dependent 
on oil revenues in the 1970s. By 1977, oil revenues had reached 
US$20 billion per year (79 percent of total government reve- 
nues). Other sectors of the economy and regions of the coun- 
try did not experience a uniform pattern of growth during this 
period. Agriculture, traditional and semi-traditional industries, 
and the services sector did not thrive to the same extent as the 
"modern" state-sponsored manufacturing industries, which 
accounted for only 6 percent of industrial employment. As 
employment opportunities in rural areas and traditional indus- 
tries decreased, public employment in urban areas increased. 
The proportion of self-employed Iranians remained stable. 

Accelerated development of the middle class was a major 
outcome of the 1960s and 1970s (see Social Class in Contempo- 
rary Iran, ch. 2). Among this class were the new professional 
intelligentsia, called motekhassesin (experts). Their common 
denominator was the professional, cultural, or administrative 
expertise acquired through modern education. Nevertheless, 
the patterns of economic growth and regional development 



148 



The Economy 



along with the political underdevelopment of the shah's 
regime in areas such as civil institutions, human rights, and 
property rights limited opportunities for the majority of Irani- 
ans to develop fully their social and economic potential. Eco- 
nomic and social polarization minimized competition among 
businesses and limited development to the part of the economy 
concerned with the interests of dominant groups closely tied to 
the shah's court and the state. Most Iranians were excluded 
from political and economic decision making. 

The Economy after the Islamic Revolution, 1979-Present 

The Iranian Revolution marked a turning point for the 
economy, which suffered from several fundamental problems. 
First, it was heavily dependent on foreign raw materials, spare 
parts, and management skills. On average, 57 percent of raw 
materials were imported from developed countries. Second, 
the banking system had collapsed, and capital flight had com- 
pounded the economic problems. As a result, manufacturing 
industries were able to utilize only 58 percent of available 
capacity after the Revolution. The West's economic blockade 
began after the occupation of the U.S. Embassy in Iran by radi- 
cal Iranian students in November 1979. Under U.S. pressure, 
many Western countries halted exports of raw materials and 
spare parts to Iran, as well as imports from Iran. They also 
reduced or eliminated investment in Iran. In addition, the 
United States froze Iranian foreign assets, which were esti- 
mated at US$10 billion to US$15 billion. Iran's crude oil 
exports declined from 4.5 million barrels a day in FY 1978 to 
780,000 barrels a day in FY 1981. Between 1980 and 1982, a 
credit crunch or "debt crisis" arose when domestic and foreign- 
owned banks decided to reduce the amount of credit to both 
business and the public. The major reason for the credit 
crunch was the outstanding debt of many manufacturing firms 
to the banking system, totaling an estimated US$8.5 billion to 
US$10.1 billion. 

Following the Revolution, the Islamic Republic of Iran's pri- 
mary objective was to transform the economy by rejecting both 
Eastern and Western economic philosophies. The government 
linked economic dependency with the Westernization of Iran 
and the existence of big businesses. This attitude was converted 
into an antibusiness sentiment that targeted both small-scale 
manufacturing establishments and big-business entities. These 
businesses were portrayed as pro-Western, antilabor, and anti- 



149 



Iran: A Country Study 

Islam. The trade sector, consisting of small entities loosely con- 
nected with religious organizations and leaders, was not signifi- 
cantly influenced by this negative attitude. A large share of the 
business profits generated since the Revolution has been in 
trade, real estate, and construction rather than the manufac- 
turing sector. 

The Iran-Iraq War, which started in September 1980, com- 
pounded existing economic and financial difficulties and cre- 
ated major social problems. Managing the war forced the 
Iranian government to compete with the private sector in the 
labor, financial, and foreign-exchange markets, as well as in the 
markets for goods and services. The war absorbed up to 20 per- 
cent of total public expenditures as tax revenues declined 
throughout the 1980s. The period after the war brought 
greater stability to Iran along with an increase in oil revenues. 
The new regime's first economic development plan (1990-95; 
see Glossary), which resulted in an annual real economic 
growth rate of 7.2 percent, recognized the role of the private 
sector in the reconstruction of the war-damaged economy. Oil 
revenues accounted for 73 percent of government revenues 
during this period. The second and third development plans 
(1995-2000; 2000-2005) were enacted under similar condi- 
tions but were implemented on a broader scale. Both plans 
stimulated moderate economic growth. However, they failed to 
increase tax revenues and the role of the private sector in the 
Iranian economy. 

The Role of Government 

The government plays a significant role in Iran's economy, 
either directly through participation in the production and dis- 
tribution of goods and services, or indirectly through policy 
intervention. In the 1990s and the early 2000s, Iranian govern- 
ments have seen intervention as necessary to counter both the 
market inefficiencies frequently associated with developing 
countries and imbalances in the production and distribution of 
basic goods. Imbalances resulting from unfavorable income 
distribution, a lack of linkages among industries, and regional 
income and employment disparities seemingly increased in the 
recent economic history of Iran. Under the Pahlavis, the role 
of government expanded as oil revenues increased. The oil rev- 
enues made it possible to establish a modern army; invest in 
infrastructure, health, education, and new industries; and 
establish a complex government bureaucracy. 



150 



The Economy 



The economic problems of recent decades accelerated the 
process of government intervention in economic life. Article 
44 of the Iranian constitution states that "The economic sys- 
tem... consists of three sectors: state, cooperative, and private. 
The state sector is to include all large-scale and major indus- 
tries, foreign trade, major mineral resources, banking, insur- 
ance, energy, dams and large-scale irrigation networks, radio 
and television, post, telegraphic and telephone services, avia- 
tion, shipping, roads, railroads, and the like owned and admin- 
istered by the state. The private sector consists of those 
activities... that supplement the economic activities of the state 
and the cooperative sector." Thus, the constitution treats the 
private sector as the means of furnishing the government's 
needs rather than responding to market requirements. By the 
end of FY 1981, under the Law of Protection and Development 
of National Industries, 580 large industrial enterprises had 
been nationalized and were operating under the control of the 
Ministry of Industry and the Ministry of Mining and Metals. 

Beginning in the 1990s, the government's central role in 
Iran's economy has been formalized in a series of five-year 
national economic development plans. The economy is cur- 
rently operating under the fourth plan, which began in March 
2005. These plans set goals for national budget income and 
expenditures, for the allocation of resources, and for growth 
rates and priorities among the branches of the economy. Cen- 
tral themes in development planning have been the allocation 
of revenues between the petroleum and nonpetroleum sectors 
of the economy, adjustments in the relative importance of state 
and private enterprises, and the role of competition in the 
economy. In general, planners have sought a smaller role for 
petroleum and an expanded share for private enterprise. How- 
ever, the statistical manifestations of these goals never have 
been met. 

Influenced by policies of the International Monetary Fund 
(IMF) and the World Bank, as well as the economic burden of 
state economic enterprises (SEEs), since the end of the Iran- 
Iraq War the Iranian government has changed economic and 
industrial policy in favor of privatization and economic liberal- 
ization. This shift was apparent in the second and third eco- 
nomic development plans. One objective of these two 
development plans was to create a favorable environment for 
strong economic growth through increased participation by 
the private sector in investment and ownership. However, 



151 



Iran: A Country Study 

results were mixed, and the government share of economic 
activities actually increased during this period. For example, in 
the 1990s the number of SEEs increased from 268 to 453, and 
the annual budget of SEEs ballooned from US$506 million to 
US$18 billion. Between FY 1995 and FY 2004, the funding of 
SEEs absorbed more than 60 percent of the annual govern- 
ment budget. The government's budget for FY 2004 included 
funding for 510 SEEs, budget allocations for which totaled 
about US$49 billion — 65.5 percent of the total budget that 
year. The private sector's share of GNP that year was 20 to 25 
percent, according to the Chamber of Commerce of Iran. 

The SEEs also receive financial support from both domestic 
and foreign sources. They received about US$11 million in 
loans from domestic banks and foreign sources during FY 
2003; 66 percent of this amount was financed through foreign 
loans. Thus, SEEs have had a substantial presence in money 
and labor markets. The government also paid about US$2 bil- 
lion in subsidies to businesses and consumers for the produc- 
tion and consumption of household and business necessities in 
FY 2003, 246 times more than it paid in FY 1978. In part, the 
intent was to make products such as wheat, rice, milk, and 
sugar affordable for low-income families and farmers. The pol- 
icy of subsidies was in conformity with Article 43 of the consti- 
tution, which emphasizes the role of the government in 
eradicating poverty and privation and in providing for the 
basic needs of the general population. The second goal of the 
subsidy program was to support the producers of certain goods 
such as paper, detergent, and pesticides. One of the primary 
objectives of the third development plan (2000-2005) was to 
reduce the size of the public sector and its presence in the 
economy and to increase competition. According to a report 
by the Management and Planning Organization (MPO), how- 
ever, during that period the budget for SEEs grew by more 
than 231 percent, and the number of SEEs also increased from 
504 to 519. Thus, the Iranian economy again moved toward 
bigger government during the third development plan. 

Government enterprises and corporations (enterprises with 
more than 50 percent public ownership) have a large place in 
the government's total general budget. Since the Revolution, 
the budget for government enterprises has increased. For 
example, between FY 2002 and FY 2005, the nominal budget of 
government enterprises increased from about US$57 billion to 
about US$121 billion. 



152 



The Economy 



Following the parliamentary elections of 2004, new initia- 
tives sought to reduce the role of government in the national 
economy. The privatization clauses of Article 44 of the constitu- 
tion were liberalized by amendment in 2005. In mid-2006, a 
decree by the Leader, Sayyid Ali Khamenei (in power 1989- ), 
called for about 80 percent of state enterprises to be privatized, 
with the aim of energizing private input into the economy and 
redistributing wealth. The oil industry, state banks, and enter- 
prises of strategic importance were the main exceptions in the 
decree, which was strongly supported by President Mahmoud 
Ahmadinejad (in office 2005- ). 

Human Resources 

Iran has natural resources and an educated labor force suffi- 
cient to feed and provide essential services and employment to 
its population, the growth of which slowed dramatically in the 
late 1990s and early 2000s (see Population, ch. 2). According to 
preliminary figures from the 2006 census, Iran's total popula- 
tion was estimated at about 70 million. Employment growth 
may become a major issue if Iran remains dependent on 
imports of raw materials, machinery, and other necessities 
(sources of employment and income) and on exports of oil, 
gas, and other mineral commodities (nonrenewable 
resources) . In FY 2004 the share of labor resources in the gross 
domestic product (GDP — see Glossary) reportedly was 29 per- 
cent, compared with 75 percent in the United States. The con- 
tribution of labor to GDP is so small because in Iran the shares 
of natural resources (34 percent) and physical resources (37 
percent) in national output are relatively very high. The high 
concentration of population in urban areas (68.4 percent in 
2006) and the continued high rate of urban growth are addi- 
tional concerns. 

Labor Force Participation 

Between 1956 and 2004, Iran's labor force (all persons aged 
10 years and older, employed or unemployed during the last 
seven days preceding an enumeration) increased from 6.0 mil- 
lion to 22.4 million. During this period, the total labor force 
participation rate declined from 32 percent to 31 percent. Fac- 
tors in the decline in labor market participation by both males 
and females include an increased tendency for those age 10 
and older to remain in school (the share of students not in the 



153 



Iran: A Country Study 

labor force increased from 10 percent in 1956 to 45 percent in 
2004), a decline in the number of active job seekers among the 
unemployed, and an increase in the labor market's turnover 
rate. In 1956 the labor force's male participation rate was 57.0 
percent; it increased to 63.3 percent by 2004. The female labor 
force participation rate increased from 6.2 percent to 11.2 per- 
cent (13.5 percent in rural areas) between 1956 and 2004. 
However, all of that growth occurred before 1979 and after 
1996. In 2004 employed females accounted for 13.8 percent of 
the total employed population — an increase of only 3.1 per- 
cent over the previous 47 years. Thus, despite women's educa- 
tional achievements over the half-century, their labor force 
participation rate and share of employment have remained rel- 
atively constant, at very low levels. 

Unemployment 

Iran's population is young and urbanized, with 60 percent 
under 30 years of age. For these reasons, in the early 2000s 
unemployment was one of the most challenging issues con- 
fronting the Iranian government. In the years following the 
1996 census, the unemployment rate increased to 13.2 percent 
as large numbers of young people flooded the job market. The 
official unemployment rate was 12.5 percent in 2004. The 
unofficial rate in 2004 and subsequently was an estimated 14 
percent. In 1996 female unemployment rates were estimated at 
19.0 percent for the country as a whole and 14.3 percent for 
rural areas; during the 1976 and 1986 censuses, the rates were 
25 percent and 21 percent, respectively. Between 2000 and 
2004, an average of 705,000 new job seekers entered the labor 
market annually. Job growth, however, did not keep up. Only 
2.28 million jobs were created in that period (570,000 each 
year) — only 78 percent of the third development plan's goal. 
Unemployment was highest among 15- to 19-year-olds (the 
largest portion of the labor force). Among 15- to 29-year-olds, 
the jobless rate was 14.8 percent in 1997; by 2001, the rate had 
increased to 27.5 percent. In 2004 the unemployment rate for 
this cohort reportedly was 34.0 percent, and it was estimated 
that if the annual unemployment rate of 13.2 percent persisted 
through 2007, the jobless rate among this age-group would 
reach 50 percent. In 2002 the parliament (Majlis — see Glos- 
sary) passed a resolution encouraging Iranian job seekers to 
work overseas (in other Persian Gulf countries and Southeast 
Asian countries) under the supervision of the government. 



154 



The Economy 



Since then, however, only a negligible number of Iranian blue- 
collar and professional workers have gained such employment. 

The Distribution of Employment 

In 2004 private-sector employment was 16.8 million, and 
public-sector employees numbered 5.6 million. The share of 
public-sector employment increased between 1965 and the 
early 2000s as oil and gas revenues grew. The private-sector 
share of total employment, which was 90 percent in 1956, 
declined to 75 percent in 2004 as the public-sector share 
increased from 10 percent to 25 percent — an average annual 
growth rate of 5.5 percent — during this period. By comparison, 
in the early 2000s overall employment grew at a rate of only 2.9 
percent annually. Most of the public-sector job growth 
occurred after 1977. Meanwhile, between 1956 and 2004 pri- 
vate-sector employment increased at a moderate rate of 1.5 
percent. 

In 2004 self-employed individuals constituted the largest 
group within the private sector, totaling 5.3 million. The high- 
est proportion of self-employed individuals was in the services 
sector (46 percent), followed by agriculture (42 percent). 
Wage and salary earners were the other major group in the pri- 
vate sector. Between 1956 and 2004, the number of employees 
in this group also increased, from 2.25 million to 5.06 million. 

Predominant in the structure of the agricultural workforce 
are small farms that employ few workers and rely heavily on 
unpaid family members for labor (see Agriculture, Forestry, 
and Fishing, this ch.). In 2004 the agricultural sector had 
687,000 wage and salary earners, of which the public sector 
(including cooperatives) accounted for only 13 percent. Some 
61 percent of unpaid family workers were in agriculture that 
year. 

Beginning in the mid-1950s, significant shifts occurred in 
the employment structure among the economic sectors. 
Between 1956 and 2004, agriculture's share of total employ- 
ment declined from 56.3 percent to 21.7 percent (see table 6, 
Appendix) . Concurrently, the services sector's share increased 
from 23.6 percent to 47.7 percent, at a pace corresponding to 
the growth of public-sector jobs in the labor market. Industry's 
share (including mining, manufacturing, construction, water, 
and energy) increased from 20.1 percent in 1956 to 34.2 per- 
cent in 1976, then declined to 25.3 percent by 1986 (see Indus- 
try and Construction, this ch.). During the 1990s and early 



155 



Iran: A Country Study 

2000s, it again increased, reaching 30.7 percent in 1996 and 
30.6 percent in 2004. The shares of manufacturing and con- 
struction employment have fluctuated less than those of the 
other sectors. 

Organized Labor 

Although Iran belongs to the International Labor Organiza- 
tion (ILO, which nominally guarantees workers the right to 
organize and negotiate with employers) and Iran's constitution 
guarantees the right to form unions, labor unions in Iran have 
suffered severe repression, particularly under the Ahmadinejad 
regime. In the first half of 2007, some 600 labor leaders report- 
edly were imprisoned, and thousands of workers have been 
imprisoned for activities deemed hostile to the regime. The 
government controls labor through the Workers' House, which 
is the only legal national labor organization, representing 
workers in labor negotiations with management representa- 
tives in Islamic labor councils. Those councils are the only 
forums sanctioned by the government for such negotiations. A 
particularly active labor organization has been the Bus Drivers' 
Union of Tehran, whose 17,000 members periodically have 
engaged anti-union regimes and staged protests in the postrev- 
olutionary period. 

National Output Measurements 

Iran has systematically measured national output (the 
annual value of all final goods and services produced for mar- 
ket transaction) since 1960, when the newly established central 
bank (Bank Markazi) was given responsibility for collecting 
and computing national accounts data. Bank Markazi has 
employed procedures recommended by the United Nations to 
estimate GDP. However, reliable estimates of GDP have been 
hampered by a lack of trained personnel and the existence of a 
large proportion of nonmonetary transactions within the econ- 
omy. Domestic output typically is estimated in three sectors: 
agriculture, industry and mining, and services. Estimates for 
the oil and gas sector are made separately because of that sec- 
tor's importance in the economy (see table 7, Appendix). 

Gross Domestic Product 

The long-term growth trend of Iran's GDP between 1960 
and the late 1970s was reversed during the Revolution and the 



156 





A young vegetable vendor 
Courtesy Nader Davoodi 



157 



Iran: A Country Study 

years immediately following. Both internal and external factors 
were responsible for this reversal, which was sharpest in the oil 
and gas sector. Between 1978 and 1989, GDP decreased at an 
average annual rate of 1.7 percent. During the same period, 
the agriculture sector grew at 4.5 percent annually. With recon- 
struction programs and a recovery in oil output, real economic 
growth rebounded between 1990 and 2004. GDP increased at 
an average rate of about 5.3 percent annually (in constant 
prices) during this period. Fluctuations in the GDP growth pat- 
tern during this period included a recovery period from 1989 
to 1993 and a recession during 1993-94, when the economy 
experienced lower oil prices and economic sanctions. Between 
2000 and 2004, because of increases in crude oil prices, above- 
average rainfall, growth in the manufacturing sector, and eco- 
nomic stability, the country's real GDP increased by 5.6 percent 
per year, its fastest rate since the Revolution. In 2006 GDP at 
market prices was US$194.8 billion, and GDP per capita at mar- 
ket prices was US$2,978, an increase of about 6 percent over 
2005. 

Because the country's population increased by 25 percent 
between 1989 and 2004, per capita GDP in constant prices 
remained below its 1978 level. Overall, real GDP growth in Iran 
averaged about 5.0 percent a year (about 2.4 percent in per 
capita terms) from 1960 to 2004. Nonhydrocarbon GDP grew 
at a faster pace of 5.8 percent, while hydrocarbon GDP grew by 
2.2 percent during this period. 

Although average per capita income increased substantially 
between 1990 and 2004, evidence suggests that the entire pop- 
ulation did not benefit from this economic growth, and some 
subsets of the population remained untouched. Although over- 
all income distribution improved, the growth primarily bene- 
fited the wealthiest 10 percent of the population, while the 
next 30 percent received a relatively smaller share. Reportedly, 
15 percent of the population was in absolute poverty. In 2004 
average annual income of an urban household (from all 
sources) was about US$4,500, and that of a rural household 
averaged about US$2,800. The average annual expenditure was 
US$4,822 in urban areas and US$3,021 in rural areas that year. 
For the average family, expenditures on housing, food, and 
utilities were the fastest growing. 

Industry and mining was the economic sector with the high- 
est growth rate in the early 2000s. Within this sector, between 
2000 and 2004 manufacturing grew at an annual rate of 10.6 



158 



The Economy 



percent. At 4.8 and 4.4 percent, respectively, the growth rates 
for services and agriculture lagged behind the average annual 
GDP growth rate during this period. 

Gross Domestic Expenditure 

Gross domestic expenditure (GDE) figures suggest that 
spending for private consumption increased as GDP grew 
between 1960 and 2004, except during the Revolution. During 
this period, Iran's investment rate (average total investment 
divided by GDP) exceeded 30 percent — a level comparable to 
that in the high-growth East Asian countries. Gross investment 
in equipment and construction increased at a rate of 7.4 per- 
cent of GDE. However, the share of investment in equipment 
did not keep pace with capital formation, most of which 
occurred in the construction sector. 

Equipment investment has been the most volatile portion of 
total domestic expenditures. The share of equipment invest- 
ment surpassed construction investment for the first time in 
1996 and continued to increase in the early 2000s. Between 
1995 and 2004, the private sector's share of equipment invest- 
ment increased steadily, as the second and third five-year devel- 
opment plans made more investment opportunities available 
to the private sector. 

The Informal Sector 

Informal-sector activities primarily engage small-scale mer- 
chants selling a variety of items. However, the informal sector 
of the economy also includes carpenters, masons, tailors, and 
other tradespeople, as well as private tutors, cooks, and taxi 
drivers, offering virtually the full range of basic skills needed to 
provide goods and services to large sections of the population. 
Thus, informal employment is not confined to the peripheries 
of the large cities, particular occupations, or even specific eco- 
nomic activities. Government largely ignores, rarely supports, 
and sometimes actively discourages informal-sector activities. 
Such activities are not regulated, and they operate largely out- 
side the system of government benefits and regulations. Thus, 
the informal sector is not included in GDP measurements; it 
also does not pay its share of taxes. In the early 2000s, most 
experts believed that economic activity in the informal sector 
accounted for about 20 percent of the Iranian GDP. 



159 



Iran: A Country Study 



The Petroleum Industry 

In 2004 Iran produced 5.1 percent of the world's total crude 
oil (3.9 million barrels per day — bpd; see Glossary), which gen- 
erated revenues of US$25 billion to US$30 billion and was the 
country's primary source of foreign currency and employment. 
At 2006 levels of production, oil proceeds represented about 
18.7 percent of GDP. However, the importance of the hydrocar- 
bon sector to Iran's economy has been far greater. The oil and 
gas industry has been the engine of economic growth, directly 
affecting public development projects, the government's 
annual budget, and most foreign-exchange sources. In FY 
2004, for example, the sector accounted for 25 percent of total 
government revenues and 85 percent of the total annual value 
of both exports and foreign currency earnings. However, oil 
and gas revenues are affected by the value of crude oil on the 
international market. It has been estimated that at the Organi- 
zation of the Petroleum Exporting Countries (OPEC — see 
Glossary) quota level (December 2004) , a one-dollar change in 
the price of crude oil on the international market would alter 
Iran's oil revenues by US$1 billion. 

Historical Overview 

The Era of International Control, 1901-79 

The history of Iran's oil industry began in 1901, when British 
speculator William D'Arcy received a concession to explore 
and develop southern Iran's oil resources. The discovery of oil 
in 1908 led to the formation in 1909 of the London-based 
Anglo-Persian Oil Company (APOC). By purchasing a majority 
of the company's shares in 1914, the British government 
gained direct control of the Iranian oil industry, which it would 
not relinquish for 37 years. After 1935 the APOC was called the 
Anglo-Iranian Oil Company (AIOC). A 60-year agreement 
signed in 1933 established a flat payment to Iran of four British 
pounds for every ton of crude oil exported and denied Iran any 
right to control oil exports. 

In 1950 ongoing popular demand prompted a vote in the 
Majlis to nationalize the petroleum industry. A year later, the 
government of Prime Minister Mohammad Mossadeq formed 
the National Iranian Oil Company (NIOC). A 1953 coup d'etat 
led by British and U.S. intelligence agencies ousted the Mos- 
sadeq government and paved the way for a new oil agreement 



160 



Petroleum is the engine that drives the Iranian economy. 

Courtesy United Nations (E. Adams) 



(see Mossadeq and Oil Nationalization, ch. 1). In 1954 a new 
agreement divided profits equally between the NIOC and a 
multinational consortium that had replaced the AIOC. In 1973 
Iran signed a new 20-year concession with the consortium. 

Beginning in the late 1950s, many of Iran's international oil 
agreements did not produce the expected outcomes; even 
those oil companies that managed to extract oil in their desig- 
nated areas contributed very little to the country's total oil pro- 
duction. By the time of the Islamic Revolution of 1978-79, the 
five largest international companies that had agreements with 
the NIOC accounted for only 10.4 percent of total oil produc- 
tion. During this period, Iran's oil industry remained discon- 
nected from other industries, particularly manufacturing. This 
separation promoted inefficiencies in the country's overall 
industrial economy. 

The Era of Nationalized Oil, 1979- 

Following the Revolution, the NIOC took control of Iran's 
petroleum industry and cancelled Iran's international oil 
agreements. In 1980 the exploration, production, sale, and 
export of oil were delegated to the Ministry of Petroleum. Ini- 
tially Iran's postrevolutionary oil policy was based on foreign 



161 



Iran: A Country Study 

currency requirements and the long-term preservation of the 
natural resource. Following the Iran-Iraq War, however, this 
policy was replaced by a more aggressive approach: maximizing 
exports and accelerating economic growth. Prior to 1998, Iran 
did not sign any oil agreements with foreign oil companies. 
Early in the first administration of President Mohammad 
Khatami (in office 1997-2005), the government paid special 
attention to developing the country's oil and gas industry. Oil 
was defined as intergenerational capital and an indispensable 
foundation of economic development. Thus, between 1997 
and 2004 Iran invested more than US$40 billion in expanding 
the capacity of existing oil fields and discovering and exploring 
new fields and deposits. These projects were financed either in 
the form of joint investments with foreign companies or 
domestic contractors or through direct investment by the 
NIOC. In accordance with the law, foreign investment in oil 
discovery was possible only in the form of buyback agreements 
under which the NIOC was required to reimburse expenses 
and retain complete ownership of an oil field. Marketing of 
crude oil to potential buyers was managed by the NIOC and by 
a government enterprise called Nicoo. Nicoo marketed Iranian 
oil to Africa, and the NIOC marketed to Asia and Europe. 

Oil Production and Reserves 

Total oil production reached a peak level of 6.6 million bpd 
in 1976. By 1978, Iran had become the second-largest OPEC 
producer and exporter of crude oil and the fourth-largest pro- 
ducer in the world. After a lengthy decline in the 1980s, pro- 
duction of crude oil began to increase steadily in 1987. In 2006 
Iran produced 4.0 million bpd and exported 2.5 million bpd. 
Accounting for 5.1 percent of world production, it returned to 
its previous position as OPEC's second-largest producer. 
According to estimates, in 2005 Iran had the capacity to pro- 
duce 4.5 million bpd; it was believed that production capacity 
could increase to 5 million bpd by 2010, but only with a sub- 
stantial increase in foreign investment. Iran's long-term sustain- 
able oil production rate is estimated at 3.8 million bpd. 

In 2006 Iran reported crude oil reserves of 132.5 billion bar- 
rels, accounting for about 15 percent of OPEC's proven 
reserves and 11.4 percent of world proven reserves. While the 
estimate of world crude oil reserves remained nearly steady 
between 2001 and 2006, at 1,154 billion barrels, the estimate of 
Iran's oil reserves was revised upward by 32 percent when a new 



162 



The Economy 



field was discovered near Bushehr. In the early 2000s, leading 
international oil firms from China, France, India, Italy, the 
Netherlands, Norway, Russia, Spain, and the United Kingdom 
had agreements to develop Iran's oil and gas fields. In 2004 
China signed a major agreement to buy oil and gas from Iran, 
as well as to develop Iran's Yavaran oil field. The value of this 
contract was estimated at US$150 billion to US$200 billion 
over 25 years. A more modest yet important agreement was 
signed with India to explore and produce oil and natural gas in 
southern Iran. In 2006 the rate of production decline was 8 
percent for Iran's existing onshore oil fields (furnishing the 
majority of oil output) and 10 percent for existing offshore 
fields. Little exploration, upgrading, or establishment of new 
fields occurred in 2005-6. 

Oil Refining and Consumption 

In 2006 Iran's refineries had a combined capacity of 1.64 
million bpd. The largest refineries have the following capaci- 
ties: Abadan, 400,000 bpd; Esfahan, 265,000 bpd; Bandar-e 
Abbas, 232,000 bpd; Tehran, 225,000 bpd; Arak, 150,000 bpd; 
and Tabriz, 112,000 bpd (see fig. 8). In 2004 pipelines con- 
veyed 69 percent of total refined products; trucks, 20 percent; 
rail, 7 percent; and tankers, 4 percent. Oil refining produces a 
wide range of oil products, such as liquefied petroleum gas 
(LPG), gasoline, kerosene, fuel oil, and lubricants. 

Between 1981 and 2004, domestic consumption of oil prod- 
ucts increased from 0.6 million bpd to 1.1 million bpd — an 
average annual growth rate of 2.6 percent. Most of this growth 
in consumption occurred between 1980 and 2001. Between 
1981 and 2004, consumption of gasoline grew by 6 percent 
annually, but domestic production met only 75 percent of 
demand for this product. In 2004 the country imported US$1.6 
billion worth of gasoline. By 2006 it imported 41 percent of its 
gasoline. Most imported gasoline is purchased at very high 
prices from the Middle East and Venezuela. Iran had invested 
between US$100 million and US$150 million to expand gaso- 
line production to 8 million liters per day by 2007. 

Trade in Oil and Oil Products 

In 2006 exports of crude oil totaled 2.5 million bpd, or 
about 62.5 percent of the country's crude oil production. The 
direction of crude oil exports changed after the Revolution 
because of the U.S. trade embargo on Iran and the marketing 



163 



Iran: A Country Study 




9 


National capital 


J* 


Machine tools plant 


• 


City 


1 


Sugar mill 


1 — 1 


Natural gas field 




Rug center 




Oilfield 




Cotton mill 




Main oil pipeline 


Pb/Zn 


Lead and zinc deposit 




Main gas pipeline 


Fe 


Iron ore deposit 




Natural gas processing plant 


Cu 


Copper deposit 


II 


Petroleum refinery 




Nuclear research or processing 




Petrochemical plant 




Automobile manufacturing 


La 


Steel Mill 







Not all fields and pipelines are shown, and locations are approximate. 



Figure 8. Industry and Mining, 2005 



164 



The Economy 



strategy of the NIOC. Initially, Iran's postrevolutionary crude 
oil export policy was based on foreign currency requirements 
and the need for long-term preservation of the natural 
resource. In addition, the government expanded oil trade with 
other developing countries. While the shares of Europe, Japan, 
and the United States declined from an average of 87 percent 
of oil exports before the Revolution to 52 percent in the early 
2000s, the share of exports to East Asia (excluding Japan) 
increased significantly (see table 8, Appendix). In addition to 
crude oil exports, Iran exports oil products. In 2006 it exported 
282,000 barrels of oil products, or about 21 percent of its total 
oil product output. 

Natural Gas 

In addition to the natural gas associated with oil exploration 
and extraction, an estimated 62 percent of Iran's 32.3 trillion 
cubic meters of proven natural gas reserves in 2006 were 
located in independent natural gas fields, an amount second 
only to those of Russia. In 2006 annual production reached 105 
billion cubic meters, with fastest growth occurring over the pre- 
vious 15 years. In 2006 natural gas accounted for abut 50 per- 
cent of domestic energy consumption, in part because 
domestic gas prices were heavily subsidized. 

Since 1979, infrastructure investment by Iranian and foreign 
oil firms has increased pipeline capacity to support the Iranian 
gas industry. Between 1979 and 2003, pipelines to transport 
natural gas to refineries and to domestic consumers increased 
from 2,000 kilometers to 12,000 kilometers. In the same 
period, natural gas distribution pipelines increased from 2,000 
kilometers to 45,000 kilometers in response to growing domes- 
tic consumption. Gas processing plants are located at Ahvaz, 
Dalan, Kangan, and Marun, in a corridor along the northern 
Persian Gulf close to the major gas fields. South Pars, Iran's 
largest natural gas field, has received substantial foreign invest- 
ment. With its output intended for both export and domestic 
consumption, South Pars is expected to reach full production 
in 2015. The output of South Pars is the basis of the Pars Spe- 
cial Economic Energy Zone, a complex of petrochemical and 
natural gas processing plants and port facilities established in 
1998 on the Persian Gulf south of Kangan. 

In the 1980s, Iran began to replace oil, coal, charcoal, and 
other fossil-fuel energy sources with natural gas, which is envi- 
ronmentally safer. The share of natural gas in household 



165 



Iran: A Country Study 

energy consumption, which averaged 54 percent in 2004, was 
projected to increase to 69 percent by 2009. Overall, natural 
gas consumption in Iran was expected to grow by more than 10 
percent per annum between 2005 and 2009. 

With international oil prices increasing and projected to 
continue increasing, international demand for natural gas and 
investment in production and transportation of natural gas to 
consumer markets both increased in the early 2000s. Iran set a 
goal of increasing its natural gas production capacity to 300 bil- 
lion cubic meters by 2015 while keeping oil production stable. 
To achieve this capacity, the government has planned a joint 
investment worth US$100 billion in the oil and gas industry 
through 2015. In 2004 Iran signed a contract with France and 
Malaysia for production and export of natural gas and another 
agreement with European and Asian companies for expansion 
and marketing of its natural gas resources. In 2005 Iran 
exported natural gas to Turkey and was expected to expand its 
market to Armenia, China, Japan, other East Asian countries, 
India, Pakistan, and Europe. The first section of a new line to 
Armenia opened in spring 2007, as a much-discussed major 
pipeline to India and Pakistan remained in the negotiation 
stage. 

Petrochemicals 

In the early 2000s, an ambitious state petrochemicals project 
called for expansion of annual output in that industry from 9 
million tons in 2001 to 27 million tons in 2013. Output capacity 
in 2006 was estimated at 15 million tons. The goal of this 
expansion is to increase the percentage of Iran's processed 
petroleum-based exports, which are more profitable than raw 
materials. In 2005 Iran exported US$1.8 billion of petrochemi- 
cal products (about one-third of total nonoil exports in that 
year). Receiving 30 percent of Iran's petrochemical exports 
between them, China and India were the major trading part- 
ners in this industry. Iran's domestic resource base gives it a 
unique comparative advantage in producing petrochemicals 
when international crude oil prices rise. The gain has been 
greatest in those plants that use liquid gas as their main input. 
For FY 2006, the petrochemical industry's share of GDP was 
projected to be about 2 percent. 

Iran's petrochemical industries have absorbed a large 
amount of private and public investment. In the early 2000s, 43 
percent of these investments was financed by Iran's National 



166 



The Economy 



Petrochemical Company, a subsidiary of the Ministry of Petro- 
leum, which administers the entire petrochemical sector. 
Another 53 percent is owned by foreign creditors (more than 
100 foreign banks and foreign companies), 3 percent by banks, 
and 1 percent by the capital market. Most of the petrochemical 
industry's physical capital is imported, and the industry does 
not have strong backward linkages to manufacturing indus- 
tries. In 2006 new petrochemical plants came online at Marun 
and Asaluyeh, and construction began on three others. 

Mining 

In 2006 Iran produced more than 15 different nonradioac- 
tive metals and 27 nonmetal minerals. The mined products 
yielding the greatest value were iron ore, decorative stones, 
gravel and sand, coal, copper ore, and limestone. In 2003 
active mines produced 99 million tons of minerals worth an 
estimated US$729 million. The fastest-growing nonpetroleum 
extraction industry is copper. An estimated 4 percent of the 
world's copper is in Iran, whose Sar Cheshnah deposit in the 
southeast is the second largest in the world. A 1997 agreement 
with the Svedala Company of Sweden has upgraded the copper 
mines and established new processing plants. Between 2001 
and 2005, the industry's annual capacity increased from 
173,000 tons to 300,000 tons. In 2006 copper accounted for 4 
percent of total exports. 

Since the Revolution, the government has retained monop- 
oly rights to the extraction, processing, and sales of minerals 
from large and strategic mines. The private sector has been 
allowed limited access to a particular class of small mines with 
the approval of relevant government agencies. Since 1998, 
however, the private sector's role has increased. A more flexible 
interpretation of the constitutional definitions of state and pri- 
vate ownership by the Expediency Council in 2004 and a 2005 
amendment to Article 44 of the constitution, which specifies 
conditions for privatization, were expected to increase the role 
of the private sector in mining. 

In 2003 a total of 2,955 mines were operating. Of these, 332 
were managed by the public sector (ministries, government 
organizations, Islamic Revolution foundations, banks, and 
municipalities), and 2,623 were run by the private sector (indi- 
viduals or private institutions). From 2003 to 2004, the mining 
industry 7 had the second-highest growth rate (12.7 percent) in 
value added, after oil and gas, among all industries. In 2004 



167 



Iran: A Country Study 



total employment in the sector was estimated at more than 
88,000. 

Adjusted for inflation, capital formation in the mining 
industries increased more than eightfold between 1986 and 
2003. During the fourth economic development plan, initiated 
in March 2005, the government planned to invest US$17 bil- 
lion in mining and related industries, US$8.5 billion of which 
would be allocated to importing tools and intermediate goods. 

Because of inefficient linkages with the manufacturing sec- 
tor, most of the necessary physical capital for mining (tools, 
machinery, and parts) is imported at relatively high prices. 
Given the country's extensive metal and nonmetal mineral 
reserves, vertical integration of mining with other industries 
would provide important employment opportunities for the 
country's rapidly growing labor force. The rise in transporta- 
tion costs is a major obstacle to further development of the 
mining industry. Transportation costs quadrupled from 2001 to 
2005 and were expected to escalate further because of a lack of 
infrastructure (highways, railroads, warehouses, and seaport 
facilities) and oil price increases. Also, mining operations have 
not been able to extract sufficient metals such as copper, zinc, 
coke, and gold to satisfy the needs of domestic industries. 

Agriculture, Forestry, and Fishing 

Agriculture traditionally was Iran's primary source of food, 
raw materials, foreign exchange, employment, and income. In 
1960 it accounted for 23.5 percent of GDP and employed 54 
percent of the labor force. By 2006, however, the share of GDP 
had declined to 11.2 percent, and agriculture employed less 
than 20 percent of the labor force. 

Of Iran's total area of 1.65 million square kilometers, about 
11 percent is arable; the remainder is covered with mountains, 
rivers, lakes, roads, and residential and industrial areas or is 
otherwise not suitable for agriculture. The most productive 
agricultural land, bordering the Caspian Sea, makes up only 
5.5 percent of the country's total land. The rugged mountains 
in the north and west are used as pastureland for meat and 
dairy livestock. Because of uneven rainfall distribution, only 10 
percent of the country receives sufficient moisture to support 
agriculture without irrigation. Iran has the requisite conditions 
(land, water, tools, and labor) to produce sufficient agricultural 
products to satisfy domestic demand. It has adequate arable 
land and water, farm tools, and experienced and knowledge- 



168 



The Economy 



able farmers. Obstacles to the application of these resources 
include inefficient water distribution, land erosion, low levels 
of productivity, underutilization or misuse of fertilizers, inade- 
quate investment and technology, insufficient use of improved 
seed, land deterioration, domination by middlemen, and a 
shortage of management expertise. 

Since the early twentieth century, most of the sector's public 
and private investments have encouraged farmers to favor cash 
crops for export. As a result, in some years the country has 
experienced shortages of staple crops, particularly wheat. Nev- 
ertheless, Iran has remained an exporter of agricultural prod- 
ucts throughout history. In the early 1980s, the revolutionary 
government focused on establishing agricultural self-suffi- 
ciency and building farm communities. Since the introduction 
of the Islamic Republic's first five-year economic development 
plan, preference has been given to large-scale farming, modern 
production methods, a more centralized administrative 
approach, and relatively scaled-down government investment. 
Although agricultural production's share of GDP declined 
from 16.4 percent to 11.2 percent between 1992 and 2006, per 
capita food production almost doubled. Iran's state-run Agri- 
cultural Products Insurance Fund, which provides producers 
security against risks of low production and price fluctuation, is 
the only such plan in the region. 

Crops and Livestock 

Iran's primary crops are wheat, barley, rice, pistachios, sugar 
beets, sugarcane, seed cotton, potatoes, legumes, tea, tomatoes, 
saffron, and onions (see table 9, Appendix). Some 85.5 percent 
of Iran's cultivated agricultural land is allocated to crops — par- 
ticularly wheat, barley, and rice. These crops are grown in sev- 
eral areas of the country; rice is the only crop grown exclusively 
under irrigation. In 2004 about 62.7 million tons of crops were 
produced in an area of 122,000 square kilometers. Significant 
gains in yield and productivity occurred in the early 2000s. Dur- 
ing that period, the total area under cultivation remained rela- 
tively constant, but the distribution of crops changed. Between 
1998 and 2003, for example, the area of wheat cultivation 
declined by 12 percent, and the area of barley cultivation by 56 
percent, while the area of pistachio cultivation increased by 
148 percent, and the area of legumes cultivation by 239 per- 
cent. 



169 



Iran: A Country Study 

Except for declines in cotton, the production of other major 
crops grew significantly between 1988 and 2003. Despite its rel- 
atively small tonnage, the pistachio crop returns very high 
value to Iran; production reached a high of 310,000 tons in 
2003. 

Iran's main livestock products are mutton, lamb, beef, veal, 
eggs, chicken, and milk from cows, goats, and sheep. Accord- 
ing to the Ministry of Agriculture, the output of poultry and 
livestock (red meat, chicken, milk, and eggs) increased from 
7.2 million tons in 1987 to 8.8 million tons in 2004. During the 
same period, the relative contribution of livestock products 
(red meat and milk) increased significantly, from 4.0 million 
tons to 7.1 million tons. In 2004 the total number of livestock 
was 63.6 million head (58 percent sheep, 32 percent goats, 9 
percent cattle, and 1 percent buffaloes and camels) . Total milk 
production was 6 million tons. Although livestock and poultry 
raising techniques have become more sophisticated in recent 
years, traditional free grazing still predominates. 

Government Agricultural Policy 

In theory, Iranian agricultural policy is intended to support 
farmers and encourage the production of strategically impor- 
tant crops. The policy is twofold: first, to purchase certain crops 
at guaranteed prices and second, to encourage the production 
of specific crops through farm subsidies. The policy of purchas- 
ing agricultural crops from farmers at guaranteed prices was 
put in place in the 1989 crop year. On average, the guaranteed 
prices increased at the rate of inflation over the past 15 years. 
Individual subsidy levels for major crops, however, vary annu- 
ally. 

In the 1990s and early 2000s, government agricultural plan- 
ning was only marginally successful. According to government 
figures, during the 1990s — coincident with the first two Islamic 
Republic economic plans — only 40.5 percent of the agricul- 
tural modernization projected by those plans was accom- 
plished, and only 40.2 percent of government and private- 
sector financial commitments materialized. 

Because wheat is considered Iran's most strategically impor- 
tant crop, it received the largest subsidies, and its production 
grew at the fastest rate between 1990 and 2005. From FY 2003 
to FY 2004, wheat subsidies increased by 17.2 percent, reaching 
a record of US$1.5 billion. Between 1981 and 2004, the area 
cultivated with wheat remained stable at 5 million hectares, but 



170 




Siphon irrigation being used in a sugar-beet field near Qazvin 

Courtesy United Nations 



Women planting rice in the Caspian Sea region 
Courtesy Nader Davoodi 



171 



Iran: A Country Study 

wheat production increased from 5.7 million to more than 11 
million tons. 

Beginning in 1990, the government expanded its agricul- 
tural support programs to include a guaranteed purchase price 
for major agricultural crops, subsidies, favorable interest rates, 
government investment, and favorable foreign-trade policies. 
Primarily because of government support for domestic agricul- 
ture, between 1989 and 2003 the import volumes of wheat, 
sugar, and red meat declined by 77.7 percent, 39.6 percent, 
and 88.2 percent, respectively. Concurrently, the value of agri- 
cultural exports increased from US$461.5 million in 1989 to 
US$1.7 billion in 2004. However, over the same period total 
food and live animal imports increased from US$1.37 billion to 
US$2.65 billion. 

Forestry 

In 2005 Iran's forest area totaled about 11 million hectares, 
approximately 7 percent of the country's surface area. Ade- 
quate rainfall and a favorable climate have created 1.5 million 
hectares of dense forest in the Caspian region. The remainder 
is distributed among western forests (3.6 million hectares), 
southern forests (434,000 hectares), desert forests (620,000 
hectares), and forests scattered in other locations. Supervised 
by the Department of Natural Resources, the Caspian forests 
produced 820,000 cubic meters of timber products in 2004, 
more than 90 percent of which was for industrial use. Although 
forests and pastures are nationalized and 12 percent of for- 
ested land is nominally protected, forest destruction by the pri- 
vate sector is routine. Limited forest areas, mismanagement, 
and destruction have compelled Iran to import lumber and 
wood products. In addition, forest fires destroy 20,000 hectares 
of forest area each year. Between 1954 and 2004, an estimated 
41 percent of Iran's forest land was lost. 

Fishing 

Access to the Caspian Sea, the Persian Gulf, the Gulf of 
Oman, and many river basins provides Iran the potential to 
develop excellent fisheries. The government assumed control 
of commercial fishing in 1952. One government-owned enter- 
prise, the Northern Sheelat Company, was established in 1952, 
and a second, the Southern Sheelat Company, was established 
in 1961. In recent years, illegal and off-season fishing, dis- 
charge of industrial and agricultural pollutants, overfishing by 



172 



The Economy 



other Caspian littoral states, and other unfavorable conditions 
have endangered Caspian fish resources. Between 1990 and 
2004, Iran's total annual Caspian Sea catch declined from 
98,000 tons to 32,533 tons, including 463 tons of sturgeon, 
which yields high-quality caviar. 

Iran has 1,786 kilometers of coastline on the Persian Gulf 
and the Gulf of Oman. These southern waters are rich in fish 
and other marine resources. In 2004 the catch off the southern 
coast totaled 299,000 tons. This represented an average annual 
increase of 12.6 percent since 1976. The southern catch either 
is used directly by households and restaurants or processed and 
preserved by industry. Expansion of the fishery infrastructure 
would enable the country to harvest an estimated 700,000 tons 
of fish annually from the southern waters. However, increased 
pollution from the oil industry and other enterprises poses a 
serious threat to this area's fishing industry. 

Since the Revolution, increased attention has been focused 
on producing fish from inland waters. Between 1976 and 2004, 
the combined take from inland waters by the state and private 
sectors increased from 1,100 tons to 110,175 tons. 

Industry and Construction 

Iran's industries include indigenous small businesses (pro- 
ducers of handicrafts, carpets, and other light goods) and 
large-scale manufacturers of consumer or intermediate goods. 
While smaller industries rely on domestic sources of labor, raw 
materials, and tools, larger ones depend primarily on imported 
raw materials and investment. Introduced into the Iranian 
economy during the reign of Reza Shah Pahlavi (1925-41), 
large-scale and "modern" industries have not grown in 
response to the needs of the economy, but rather in response 
to political goals, economic concessions, regional pressures, 
and, most importantly, the ebb and flow of oil revenues. 

Handicrafts 

Throughout history, Iranians have been involved in handi- 
craft activities that evolved in response to available resources 
and markets in various parts of the country. These industries 
include the manufacture of glassware, pottery, tile and other 
construction materials; architecture; jade; the working of metal 
and wood; and the production of leather products, textiles, 
apparel, paintings and sculpture, and, most notably, carpets. 



173 



Iran: A Country Study 

Handicraft activities serve the needs of agriculture, construc- 
tion, transportation, defense, households, businesses, and 
other sectors of the economy. These industries are complemen- 
tary to the farm sector and obtain 90 percent of their resources 
domestically. In addition, handicrafts are a major source of 
employment, export revenue, and foreign exchange. Through 
the middle of the Qajar era (1795-1925), handicraft industries 
were dynamic, diversified, and competitive. These industries 
lost their economic standing, however, as competing manufac- 
tured goods, particularly textiles and apparel, were imported 
more freely, and Iran began to export more raw materials such 
as silk and cotton to Europe and India. Growth occurred only 
in handicrafts that had large domestic or international mar- 
kets, such as carpets and rugs, and those that were more com- 
petitive, such as leather products. 

Iranians were the earliest carpet weavers among the ancient 
civilizations; through centuries of creativity and ingenuity, their 
carpets achieved a unique degree of excellence. Persian car- 
pets and rugs always have been an intrinsic part of Iranian cul- 
ture and daily life. The craft holds a unique position in 
industrial production, sales, and exports. It is complementary 
to both agriculture and rural industries. During the Pahlavi 
dynasty (1925-79), the craft of carpet making was encouraged 
both directly, through orders for the court and government, 
and indirectly, through facilitated export and trade. Carpet 
making has played a pivotal role in rural development. In FY 
1997, 1.81 million Iranians (85 percent of them female), work- 
ing in a total of about 901,000 households, were engaged in 
cottage industries that manufactured about US$400 million of 
carpets and rugs. In addition, cooperatives employing a total of 
114,931 workers were producing handwoven carpets. Although 
official statistics are not available, it has been reported that 
between 4 and 7 million individuals in rural and urban areas 
were directly and indirectly engaged in this industry in FY 2004. 

After a sharp reduction in the early 1980s, carpet exports 
surged to a record high of US$600 million in the 1990s. 
Despite stagnation and intense international competition, Iran 
held a 20 percent market share in FY 2004, exporting carpets 
valued at a total of US$600 million. That year the industry 
directly employed 1.8 million laborers, 90 percent of whom 
were in rural areas. 



174 




The manufacturing of carpets and rugs is an important element in Iran's economy. 

Courtesy United Nations (John Isaac) 

Artisan preparing ceramic bowls 
Courtesy Nader Davoodi 



175 



Iran: A Country Study 



Manufacturing 

Modern manufacturing industries (plants and companies 
that produce or assemble durable and nondurable goods) were 
introduced under Reza Shah Pahlavi. Since then, manufactur- 
ing industries have generally grown faster than GDP. Their 
growth, however, has been correlated strongly with the growth 
of oil revenues. The oil revenue booms of the 1970s and 1990s 
were accompanied by high rates of manufacturing growth. 

Small Industries 

Small, light industrial establishments (i.e., those having 
fewer than 10 employees) are located in both rural and urban 
areas. In FY 2003 about 426,000 small manufacturing establish- 
ments were in operation. They produced US$6 billion of dura- 
ble goods, such as metal products, medical devices, and 
transportation equipment, and nondurable goods, such as 
food and beverages, textiles, leather, and paper products. In FY 
2003 the total capital investment in small industry was US$187 
million, the sector's value added was about US$3.2 billion, and 
small industry employed more than 1 million workers that year. 
Wage and salary earners made up 51 percent of the sector's 
total workforces, as compared to just 33 percent in 1977. 
Almost 100 percent of small manufacturing establishments 
were privately owned. 

Large Industry 

Since their introduction into the Iranian economy during 
the 1930s, large manufacturing establishments have been 
mostly state-run enterprises, generally funded with oil revenues 
and indirect taxes. The growth rates of both small and large 
manufacturing concerns have increased significantly since the 
mid-1960s because of government investment in the manufac- 
turing sector. Since the early 1990s, the government has used 
privatization and other incentives to increase the private sec- 
tor's role in manufacturing. Major manufacturing establish- 
ment indexes (output, employment, and total compensation) 
showed significant gains during this period. 

The 1996 census showed 13,371 establishments in the cate- 
gory of large industries (those having more than 10 employ- 
ees). Some 1,329 in that category had more than 100 
employees. By FY 2003, the number of establishments with 
more than 100 employees had increased to 1,797, of which 



176 




Laborers weigh and process jute in a small mill. 

Courtesy U.S. Information Agency 



111 



Iran: A Country Study 



1,397 were privately owned. The fastest growth rates occurred 
among manufacturers of durable goods, with the production 
of transportation vehicles and equipment showing the largest 
gain: Its index rose from 100 to 650 from 1996 to 2003. For 
example, from FY 2003 to FY 2004 the number of motor vehi- 
cles produced in Iran went from 531,461 to 753,378, an 
increase of more than 40 percent. In FY 2003 the total number 
of workers in large manufacturing establishments was about 
1,026,000, about half of the total manufacturing employment 
that year. 

Among Iran's most important large industries are the manu- 
facture of petrochemicals and automobiles and food process- 
ing. The petrochemicals industry, dominated by the state- 
owned National Petrochemicals Company, has grown rapidly, 
with output in FY 2002 worth US$1.4 billion. The industry has 
received substantial foreign investment. Automobile manufac- 
ture has benefited from licensing agreements with European 
and Asian manufacturers. In 2002 the largest plant, Iran Kho- 
dro, built about 260,000 units, and several smaller facilities pro- 
duced a total of about 240,000 vehicles. In 2005 Iran ceased 
production of the Paykan, which had been the chief domestic 
automobile model since the 1970s. In 2006 Khodro introduced 
the Samand model to replace the Paykan. The processing of 
agricultural products also is an important industry, dominated 
by domestic private firms. Among the major subsectors are 
grain processing and fruit and vegetable canning. 

Heavy Industry 

Iran's heavy industrial factories produce metal products 
such as steel, aluminum, and copper; nonmetal intermediate 
goods; and finished industrial products such as tractors and 
construction equipment for both domestic and foreign mar- 
kets. In the early 2000s, Iran's heavy manufacturing industry 
faced several serious challenges. First, it was largely dependent 
on imports for raw materials, spare parts, and equipment. Sec- 
ond, production standards were below international require- 
ments, and therefore little excess production could be 
exported. Third, the concentration of heavy manufacturing 
industries in Tehran Province entailed high transportation 
costs for raw materials and finished products. Other problems 
associated with these industries were a lack of domestic compe- 
tition (they were mostly monopolies or oligopolies), low pro- 
ductivity rates, low profits, insufficient internal investment, 



178 



The Economy 



relatively small size (hence, few economies of scale), and high 
demand for foreign currencies. 

The country's first modern steel mill, with a capacity of 550 
million tons per year, opened in Esfahan in 1972. This com- 
plex, which remains a key part of the industry in the early 
2000s, included factories for sheet metal and shape metal and 
had a total capacity of 1 million tons. An aluminum plant with 
a capacity of 90,000 tons and a copper mill with a capacity of 
120,000 tons were established in the early 1970s. In the 1970s, 
joint investments with East European countries and the Soviet 
Union led to the establishment of several plants to produce 
and assemble industrial machinery. Following the Revolution, 
most expansion of heavy industry occurred through joint 
investment with the United Kingdom, France, Germany, and 
Italy. The role of the private sector also increased; in 2004, for 
example, private-sector steel production reportedly was about 2 
million tons, five times more than the previous year. 

The steel industry, which is centered at Ahvaz, Esfahan, and 
Mobarakeh, has grown rapidly since 1990. In 2004 Iran pro- 
duced 19 million tons of steel and steel products (8.5 tons of 
raw steel and 10.5 tons of treated steel and steel products). For 
the period covered by the fourth economic development plan 
(March 2005-March 2010), Iran planned to increase the pro- 
duction of steel and steel products to 36 million tons. Meeting 
this goal would require substantial increases in joint investment 
and private investment and the import of appropriate raw 
materials and machinery. However, between 1995 and 2002 the 
level of investment declined. This downturn indicated that in 
the early 2000s the sector's growth was lagging far behind other 
manufacturing industries, and that its potential for future 
growth was uncertain. In FY 2004 investment in the large and 
small basic metal industries was US$11 billion. 

In addition to steel products, Iran produces aluminum and 
copper products. Between 1997 and 2004, the production of 
aluminum bars increased from 77,000 tons to 181,000 tons, 60 
percent of which was exported. In the early 2000s, the availabil- 
ity of cheap energy sources was an incentive for Iran to be 
more aggressive in attracting private and foreign joint invest- 
ment in aluminum production. In FY 2004 Italy's investment in 
aluminum production was US$345 million. For the fourth eco- 
nomic development plan, Iran set a production capacity goal 
of 240,000 tons of aluminum bars. In early 2005, the produc- 
tion capacity of aluminum increased to 230,000 tons, when the 



179 



Iran: A Country Study 

second phase of the Al-Mahdi Aluminum Complex was 
opened. The fourth economic development plan calls for the 
production capacity of copper metal to increase to 350,000 
tons. The total level of investment in this project was estimated 
at US$4.5 billion. 

Construction and Housing 

Stimulated by growing oil revenues, the economic prosperity 
that began in the mid-1960s encouraged construction, mostly 
of urban housing units. Throughout this period, advances in 
construction trends closely followed those in the oil industry. 
Similarly driven mostly by increasing oil profits, the economic 
prosperity of the 1990s led to another boom in the construc- 
tion industry. The construction industry is labor-intensive, with 
strong linkages to the extraction of materials such as sand and 
gravel. 

Between 1995 and 2004, the construction sector contributed 
an average of 29 percent of GDP. The nominal value of govern- 
ment development expenditures for construction, housing, 
and urban development programs also grew during this period 
by an annual average of 31 percent, reaching a record US$467 
million in FY 2004. Most government development expendi- 
tures were allocated to urban development programs, govern- 
ment buildings, and housing development projects. In FY 2004 
the total investment in urban housing development by the pri- 
vate and public sectors was about US$7 billion, 95 percent of 
which was private investment. Despite banks' limited financial 
resources, their contribution to the financing of private-sector 
construction and housing activities grew noticeably in the early 
2000s. Major cities, particularly Tehran, received a large por- 
tion of the banks' construction investments. Between 1995 and 
2004, new housing development projects in rural areas 
received only US$8.6 million of public development funds, 
however. The fourth development plan calls for work on 
200,000 of the 2.5 million rural housing units estimated to 
need major repair. In FY 2004, new housing construction fell 
18,000 units short of projections. 

Services 

In 2006 the value-added share of services, in constant prices, 
was 47.1 percent of GDP. Services include trade, lodging, and 
food services (30 percent), transportation and telecommunica- 



180 



The Economy 



tions (17 percent), finance and real estate (3 percent), profes- 
sional services (27 percent), and public and household services 
(23 percent). 

Domestic Trade and Distribution 

The government's role in trade and distribution was limited 
prior to the Revolution; it had monopoly rights to importation 
and distribution of only a few socially important commodities, 
such as sugar, tobacco, and concrete. (The specific commodi- 
ties were not fixed over time.) The private sector controlled 
most trade, with a few major merchants and traders managing 
domestic distribution of 80 to 90 percent of certain products. 
After the Revolution, many transportation companies, banks, 
and insurance companies were nationalized, and because of 
other internal and external factors, the production and distri- 
bution system could not continue to operate as before. Govern- 
ment intervention in the production and distribution of many 
consumer goods increased, and a new trade and distribution 
system emerged. Under this new system, foreign trade was 
solely in the hands of local and national governments, and city 
and local councils and cooperatives controlled the distribution 
channels for many goods and services. After the Iran-Iraq War, 
the government relaxed its control over the distribution of 
goods and services, and the cooperatives' role was formalized 
and institutionalized. Price controls and subsidies have 
remained as public-policy tools to combat inflation and man- 
age the prices of those key consumer goods that are perceived 
to be politically important. 

In 2004 a total of 11,937 rural and urban cooperatives were 
in operation; they had 7.4 million members and 170,000 
employees. In the early 2000s, rural cooperatives supplied their 
members with a variety of durable and nondurable consumer 
goods, such as food, chemicals, apparel, and leather products. 

In 2002 some 1,470,070 trade establishments (4,821 of them 
public enterprises) engaged in auto repair, home appliance 
repair, and wholesale and retail trade, 17 percent of them in 
rural areas and 83 percent in urban areas. Less than 1 percent 
of these establishments had more than five employees; their 
total number of employees was 2,187,658 in 2002. 

Insurance 

Before the Revolution, all insurance companies, with the 
exception of the state-owned Iran Insurance Company, were 



181 



Iran: A Country Study 

privately owned. After the Revolution, private insurance com- 
panies with joint investments were nationalized and merged 
into one company. The nationalization of banking, insurance, 
manufacturing, and some other activities in the 1980s reduced 
the role of the insurance industry. During the 1990s, the pri- 
vate sector and joint ventures with foreign interests gained an 
increased role in the insurance industry. In the early 2000s, 
insurance companies in Iran offered a range of services such as 
health, freight, fire, and life insurance. Between 1997 and 
2004, premiums received in the insurance market increased 
twelvefold; in the same period, the value of claims paid in the 
insurance market increased ninefold. In 2004 the insurance 
companies issued 14.9 million contracts, a 29.6 percent 
increase over 2003. The insurance market has been very con- 
centrated; the top four firms control 97 percent of the market. 

Tourism 

Iran's diverse cultures, climates, and historical sites have 
great potential to attract international tourists, and Iran is one 
of the safest destinations among developing countries. 
Although it is highly regarded for the diversity of its destina- 
tions and the quality of its historical-cultural sites, in FY 2004 
only 700,000 foreign visitors (of whom reportedly only 200,000 
were tourists) came to Iran, while 9.2 million Iranians visited 
other countries. In the early 2000s, Iran's share of the interna- 
tional tourism industry, 0.09 percent, ranked it seventy-sixth in 
the world. Religious sites have been among the most popular 
attractions. In the early 2000s, about 10 million people a year 
visited the shrine of Hazrat-e Masumeh, in Qom. This shrine, 
like others in Iran, has adequate regional infrastructure and 
facilities for large numbers of visitors. The island of Kish, 
located in the Persian Gulf west of the Strait of Hormuz, fea- 
tures what has become known as the Kish Free Zone. With 
most laws substantially more relaxed than those on the main- 
land, Kish has attracted growing numbers of foreign tourists 
and played a significant role in Iran's international commerce. 

The Organization of Iranian Handicrafts was established in 
2005 with the goal of increasing awareness of the significance 
of tourism in the Iranian economy through the sale of tourism- 
related products. In addition, the Cultural Heritage and Tour- 
ism Organization received government support to help it 
achieve its objective of increasing the economic contribution 
of the tourism industry. The fourth economic development 



182 



The Economy 



plan calls for the number of tourists to increase to 2.5 million, 
by means of visits of organized foreign groups. Foreign invest- 
ment in tourism is increasing; entrepreneurs in countries such 
as Germany, Spain, Italy, and France have shown interest in 
investing in hotels and historical and entertainment sites. 

In FY 2003 Iran had about 69,000 restaurants and 6,000 
hotels and other lodging places; about 80 percent of these 
establishments were in urban areas. Some 875 restaurants and 
hotels were publicly managed by cooperatives and government 
organizations. More than 95 percent of restaurants and hotels 
had fewer than five employees, and only 38 had more than 100 
employees. In FY 2002 this sector employed more than 166,000 
people, 42,000 of whom worked in places of lodging. Of the 
56,618 beds in all hotels, about half were located in three- to 
five-star hotels. 

Transportation and Telecommunications 

Iran's topography, size, and inadequate internal waterways 
make the provision of transportation facilities expensive and 
challenging. Although the transportation system is capable of 
meeting general commercial needs, specific shortfalls exist 
(see fig. 9). Expansion of transportation facilities has occurred 
mainly in response to the needs of the oil and gas, military, and 
international trade sectors. In FY 2004 the transportation sec- 
tor's value added was about US$8 billion, of which ground 
transportation accounted for 89 percent, water transportation 
6 percent, and air transportation 5 percent. The total gross 
fixed investment in the transportation sector was about US$6 
billion, 84 percent of which was for equipment. 

Roads 

Between 1960 and 1979, Iran's roads and highways increased 
from 42,000 kilometers to 63,000 kilometers. During the Iran- 
Iraq War, roadways were expanded to 100,000 kilometers, and 
by 2003 the system had expanded to 179,990 kilometers, 
100,000 of which were paved. Some 36 percent of Iran's roads 
are classified as main roads (highways and freeways). In 2004 
public roads carried approximately 348 million tons of freight 
and the equivalent of 404 million people. Some 281,000 trans- 
port vehicles (76 percent trucks, 6 percent buses) moved cargo 
and passengers. There were 2,647 transportation enterprises, 



183 




139 of which were international companies and 1,093, coopera- 
tives. 

Since 1989, road construction has stressed ring roads 
around large cities and multilane highways between major met- 
ropolitan areas. The three national autoroutes are the A— 1 
across northern Iran, from the Turkish border on the west to 
the Afghan border on the east, and connecting Tabriz, Tehran, 
and Mashhad; the A-2 across southern Iran, from the Iraqi 
border in the west to the Pakistani border in the east; and the 
Tehran-Qom-Esfahan-Shiraz highway, which traverses central 
Iran from north to south. 

Road expansion after the Revolution had spillover benefits 
to rural development, industry, and commerce, but it also facil- 
itated rural-urban migration, particularly to Tehran and other 
major cities. Expanded use of motor vehicles and the lack of 
public transportation systems have contributed to increased air 



184 



The Economy 



and noise pollution since the mid-1960s. Stimulated by govern- 
ment subsidization of gasoline prices, the number of registered 
motor vehicles increased nineteenfold between 1986 and 2004. 
In 2004 the number of registered motor vehicles was 1,926,449, 
including 634,482 passenger cars. In 2006 about three-quarters 
of domestic freight moved by truck. 

Railroads 

Foreign currency shortages, the financial burdens of war, 
and trade sanctions made it impossible for Iran to expand its 
railroads adequately in the 1980s, but railroad investment 
began to increase in the 1990s. In 2006 Iran had 8,367 kilome- 
ters of rail lines in good condition, compared with 5,800 kilo- 
meters in 1979. The five main lines of the system, most of 
which is single-track, radiate from Tehran: one runs south to 
Khorramshahr and Abadan at the head of the Persian Gulf; a 
second runs south to the Strait of Hormuz at Bandar-e Abbas; a 
third runs southeast to Kerman (with a route under construc- 
tion in 2005 farther east to Zahedan, which was already con- 
nected to Pakistan's rail system); a fourth runs east to Mashhad 
and connects with the Central Asian rail system on the Turk- 
menistan border, and includes a spur to the east side of the 
Caspian Sea; and the fifth runs northwest to Tabriz and the 
border with Turkey, where it connects to the Turkish State Rail- 
road and includes a spur to Azerbaijan's Nakhichevan enclave. 
Major rail lines connect the eastern city of Mashhad to the 
northwestern city of Tabriz and connect the Caspian Sea port 
of Bandar-e Torkaman to the Persian Gulf port of Bandar-e 
Khomeini. 

Between 1991 and 2003, the number of rail passengers 
increased from 8 million to 16 million annually. The fourth 
economic development plan calls for further expansion to 34 
million passengers, including extensive purchase of new rail 
cars. The annual volume of freight transported by rail 
increased significantly from 1991 to 2006, accounting for 
nearly 25 percent of the country's domestic freight shipments. 
Oil and mineral products accounted for about 61 percent of 
the total net freight transported; industrial materials and prod- 
ucts were next with an 18 percent share. The volume of indus- 
trial materials and products transported by rail increased by 81 
percent from 1991 to 2003. The cost of railroad transportation 
to passengers and businesses was less than that of bus and truck 
transportation. As a result, railroads were overused for some 



185 



Iran: A Country Study 



purposes, placing a financial burden on the government. To 
accommodate increased demand, in the early 2000s experts 
estimated that Iran needed 30,000 to 50,000 kilometers of rail- 
roads. 

In 2005 the new Friendship Line reportedly was opened, 
providing access for Turkey and the Central Asian countries to 
Iran's southern coast. This 1,000-kilometer railroad links north- 
eastern Iran to the south, bypassing Tehran and saving 800 
kilometers. The Friendship Line complements an existing line 
that had linked Turkmenistan to Iran's main rail system. These 
two lines, linking Iran's northeast to its southeast, can be used 
by passengers and the manufacturing, mining, and steel indus- 
tries. In 2006 a new rail line was under construction between 
Khaf in northeastern Iran and Herat in Afghanistan. Lines con- 
necting Zahedan and Esfahan with Shiraz were scheduled for 
completion in 2007. A new rail connection with Armenia was in 
the planning stage. Construction of an ambitious North-South 
Corridor, linking Russia to India via Iran, was delayed by Iran's 
nuclear controversy. 

Water Transport 

Iran has 14 ports, six of which are major commercial sea- 
ports — four in the south, on the Persian Gulf and the Gulf of 
Oman (Bandar-e Khomeini, Bushehr, Bandar-e Abbas, and 
Chabahar) , and two on the Caspian Sea (Bandar-e Anzali and 
Now Shahr) . In 2004 some 6,450 vessels entered Iranian ports, 
about 60 percent of them on the Persian Gulf. More than one- 
third of the total traffic (2,204 vessels) came through Bandar-e 
Abbas. The concentration of sea transportation through this 
port illustrates its strategic importance and the overuse of its 
infrastructure. In 2004 some 53 million tons of cargo were 
unloaded and 30 million tons loaded at Iran's main commer- 
cial seaports; 49 percent of the cargo loaded consisted of oil 
products. In 2004 Iran's largest shipping company, state-owned 
Islamic Republic of Iran Shipping (IRI Shipping), had 82 ships 
with a total of 2,944 tons of capacity. With its three affiliates 
(the Iran-India Shipping Company, the Caspian Sea Shipping 
Company, and the Valfajr-8 Shipping Company), IRI Shipping 
owned a total of 107 ships, with a cargo capacity of 3,257 tons 
and a passenger capacity of 3,058. Some 18 shipping coopera- 
tives and 290 private sea transport companies also were in oper- 
ation in 2004. 



186 



A highway in Tehran 
Courtesy Nader Davoodi 

Bandar-e Anzali on the Caspian Sea 
Courtesy Nader Davoodi 



187 



Iran: A Country Study 



Air Transport 

In 2006 Iran had 129 airports with paved runways, 41 of 
which were 3,000 meters or longer. Iran's international air- 
ports, which numbered nine in 2006, served about 4.3 million 
passengers on international flights in 2004. Some 67 percent of 
those passengers traveled on domestic airlines. Passengers car- 
ried from Iran by domestic airlines passed through more than 
40 foreign international airports. About 9 million passengers 
passed through the country's airports on domestic flights. In 
2006 the national airline, Iran Air, had a fleet of 35 aircraft and 
employed more than 7,500 personnel. Iran Air flew to 25 
domestic destinations and 35 major cities abroad, carrying 
about 5.6 million passengers and 41 million tons of cargo. In 
the early 2000s, Iran Air suffered financial losses because of its 
inflated staff and inadequate technological investments. For 
example, in 2004 its labor cost was 48 times higher than that of 
Lufthansa, the German national airline, which reportedly 
offered eight times as many flights with a much smaller staff. 

In May 2005, the new Imam Khomeini International Airport, 
the largest airport in Iran, was opened after long delays and 
about US$350 million of investment. The airport had an initial 
annual passenger capacity of 6.5 million; its final design capac- 
ity was 40 million passengers and 700,000 tons of cargo. How- 
ever, the airport service and ground transportation were 
inadequate to allow operation at these levels. In the first phase 
of operations, the airport was able to land between 200 and 250 
planes a day. During this phase, international flights were 
scheduled to be added gradually. At the end of the second 
phase of the project, the airport was to be competitive with 
other major international airports in the region. 

Electronic Media and Telecommunications 

Radio and Television 

In 2005 the state-owned National Radio and Television Orga- 
nization (Sazeman-e Seda va Seema) had sufficient radio and 
television transmission capability to reach about 95 percent of 
the population of Iran. In 2004 Iran had 92 radio stations with 
123 main radio transmitters and nine substations for reaching 
overseas listeners. In addition, four short-wave radio stations 
with 28 transmitters were in operation. In 2002 some 28 televi- 
sion stations were in operation, sending signals from six main 
channels to about 7 million television sets. Access to interna- 



188 



The Economy 



tional satellite channels, introduced in the early 2000s, has pro- 
vided Iranians in both rural and urban areas with greatly 
increased opportunities to obtain information. Although 
domestic data were not available, unofficial statistics suggested 
that at least 50 percent of households had access to interna- 
tional channels in 2005. 

Telephone 

Since the introduction of telephone service to Iran, the 
demand for telephone lines consistently has exceeded supply. 
In 2004 Iran had 1.1 million intercity automatic telecommuni- 
cations channels and 9,760 outgoing and 7,078 incoming inter- 
national channels. Between 1987 and 2004, telephones 
installed in housing units, commercial units, and public build- 
ings increased from 1.8 million to 17.7 million. During that 
period, the number of villages with telephone communication 
facilities increased from 2,329 to 41,109. Households and busi- 
nesses subscribing to mobile telephone lines increased from 
60,000 in 1997 to about 3.5 million in 2004. In 2006 an esti- 
mated 13.7 million subscribers had mobile telephone service. 
In 2005 Iran's telephone system remained inadequate to meet 
demand, but an ongoing modernization program was expand- 
ing services, especially in rural areas. Also, the widespread 
installation of digital switches increased the system's technical 
capabilities. 

Internet 

In 1998 only nine businesses provided Internet services in 
Iran; all nine were in Tehran. In 2004 official records indicated 
that 800 Internet access services were operating in major cities. 
Internet businesses are divided into two categories: Internet 
cafes and Internet service providers (ISPs). In 2005 some 319 
Internet cafes, 191 ISPs, and 94 unidentified Internet busi- 
nesses were in operation; Internet businesses employed 1,831 
full-time and part-time personnel and had 2,309 computer 
units. In 2002 Internet businesses served 7,100 customers a day 
and had about US$13 million in sales. Capital formation was 
US$3.5 million that year. Between 1997 and 2006, the number 
of Internet subscribers increased from 2,000 to 7.5 million. 
However, Internet censorship increased sharply after the elec- 
tion of Mahmoud Ahmedinejad in 2005. 



189 



Iran: A Country Study 



Energy Supply 

Electric power plants were introduced to Iran during the 
late Qajar dynasty; by the turn of the twentieth century, several 
small power plants were operating in major cities. In 1964 the 
Ministry of Power and Electricity (renamed the Ministry of 
Energy after the Revolution) began managing the production, 
distribution, and consumption of electric power. Since the mid- 
1960s, rapid urbanization and growing economic activity have 
prompted increased production and consumption of electric- 
ity. Overall production reached 152 million megawatt-hours in 
2004. That year, the nominal capacity of installed generators 
was 39,613 megawatts. Several new generating units came on 
line in 2005 and 2006. 

In 2004 some 23 hydroelectric power plants generated 11 
million megawatt-hours of electricity. Although the output of 
hydroelectric plants increased by 47 percent between 1987 and 
2004, their share of total electricity output dropped from 33 
percent to 6 percent during that period. The fourth economic 
development plan calls for an additional 6.4 million megawatt- 
hours of hydroelectric capacity by 2010. The electricity produc- 
tion of thermal power plants affiliated with the Ministry of 
Energy was 136 million megawatt-hours in 2004, an increase of 
431 percent since 1987. During that period, natural gas has 
been the fastest growing source of electricity generation. Its 
share of the total rose from 8 percent in 1987 to 32 percent in 
2004. In 2006 natural gas reportedly accounted for about 50 
percent of domestic energy consumption (see Natural Gas, this 
ch.). 

Iran has no capacity for nuclear power generation. Plans call 
for a series of nuclear reactors to be built. However, comple- 
tion of the Bushehr plant, built with Russian technical assis- 
tance, has been jeopardized by disputes with Russia and 
international objections to the facility's potential for providing 
Iran with military-grade nuclear fuel (see Nuclear Issues, ch. 
5). 

Electricity is distributed to customers nationwide by nine 
regional organizations and the national Water and Electricity 
Company. The same state-owned company, Tavenir, oversees 
generation and distribution of power throughout Iran. Regis- 
tered users of electricity numbered 18 million in 2004, an 
increase of 10 million users since 1987. This included 4.1 mil- 
lion registered rural users. In 1977 only 2,360 villages had 
access to electricity; by 2004 the number had increased to 



190 



The Economy 



47,359. Between 1989 and 2004, the consumption of electricity 
increased from 40 million to 114 million megawatt-hours. The 
largest consumers were households (33 percent), industry (32 
percent), and agriculture (13 percent). 

Subsidization of the production and consumption of elec- 
tricity in Iran has caused over-consumption. In 2004, with the 
per capita energy consumption subsidy about US$230, per cap- 
ita consumption of energy was 64 percent above the world aver- 
age. Between 1967 and 2004, per capita consumption of energy 
increased by 5 percent per annum. The government projected 
that per capita consumption would grow at 7 percent per 
annum during the fourth development plan, the same rate as 
in the early 2000s. According to estimates, to satisfy demand 
Iran would have to invest US$20 billion in the energy sector, 
increasing its electricity production and distribution capacity to 
55,000 megawatts. Aside from subsidized energy prices and the 
waste that they encourage, Iran faces the serious challenges of 
low energy storage capacity and obsolescence in distribution 
channels. In 2005 Iran's electric power industry continued to 
depend on foreign equipment, parts, and expertise, although 
to a lesser extent than in prior years. Iran is both an importer 
and an exporter of electricity. It has reciprocal relationships 
with Armenia, Azerbaijan, Pakistan, Turkey, and Turkmenistan. 
Both import and export levels have averaged about 2 million 
megawatt-hours annually. 

Fiscal and Monetary Policy 

In the twentieth century, oil profits became Iran's primary 
source of both government and foreign-exchange revenue, as 
the country became integrated into the world economy 
through its oil industry. The industry became Iran's foremost 
income-generating economic activity as measured by national 
output. Thus, national fiscal and monetary policies and 
resource allocation became tightly linked to oil revenue. Gov- 
ernment fiscal policies have been carried out through the 
development planning process. 

Fiscal Policy 

Since 1964 budget preparation has been delegated to the 
Management and Planning Organization (MPO). In addition 
to the general budget, the MPO prepares fiscal positions of 
public enterprises and corporations. Since 1987 the MPO has 



191 



Iran: A Country Study 



prepared the foreign-exchange budget and submitted it to the 
parliament with the annual budget. The general budget laws 
are designed with consideration for international crude oil 
prices and in conformity with the policies and strategies set out 
in the existing development plan. 

General Government Revenues 

The structure of government revenues and expenditures has 
shifted as the fabric of the Iranian economy has changed. 
Between 1963 and 1979, oil revenue generated approximately 
60 percent of total general revenues. Oil revenue continued to 
be an important component of general revenues after the Rev- 
olution. 

In FY 2004 total government revenue was about US$30 bil- 
lion, 49 percent from oil revenue and 25 percent from tax reve- 
nue. Between FY 1988 and FY 2004, the share of tax revenue in 
government general revenue increased from 4.5 percent to 
24.7 percent. Of that amount, 49 percent came from direct 
taxes and 51 percent from indirect taxes. An objective of the 
third development plan (March 2000-March 2005) was to 
increase tax revenue to 10.6 percent of GDP, thus reducing the 
government's general revenue dependency on oil exports. 
After the first four years of that plan, however, Iran remained as 
dependent on oil exports as before; tax revenue reached only 
5.9 percent of GDP in FY 2004 and remained approximately 
the same in FY 2005. Among the causes cited for the failure to 
reach the tax revenue goal were a culture of self-reporting (1.8 
million businesses and individuals self-reported their taxes in 
FY 2004) , inadequate tax laws and technical capabilities, and 
corruption. Because the private sector plays a small role in eco- 
nomic activities compared with the state and because some gov- 
ernment enterprises are exempt from tax reporting, the tax 
base has remained very thin. For example, government-linked 
charitable foundations, or bonyads, were expected to pay taxes 
of only about US$46 million in FY 2004, although those consor- 
tiums are believed to control about 40 percent of Iran's GDP. 
Overall, an estimated 50 percent of Iran's GDP was exempt 
from taxes in FY 2004. However, for the first time since the Rev- 
olution, in FY 2004 the government was able to collect 100 per- 
cent of tax revenue projected to come from direct and indirect 
sources (about US$7.3 billion). 

According to the budget law approved by the parliament, 
the total government budget for FY 2006 was expected to be 



192 



The Economy 



about US$180 billion. The general revenues approved by the 
parliament were about US$60 billion (a 7.5 percent increase 
over the previous year), and the revenues from government 
enterprises and corporations were estimated at US$106 billion, 
a 0.2 percent increase over the previous year. One of the 
sources of tax revenue estimated in the FY 2006 budget law was 
the tax on oil revenue (projected at US$2 billion to US$3 bil- 
lion), which was introduced for the first time that year. The 
total tax revenue estimated in the FY 2005 budget law was 
about US$14 billion. 

In October 2000, the parliament approved establishment of 
the Oil Stabilization Fund (OSF). The fund was to be financed 
from surplus foreign-exchange revenues received from oil 
exports in excess of the figures projected in the annual budget. 
Between 2000 and 2004, about US$20 billion was deposited in 
the OSF account. During the same period, US$11.4 billion was 
withdrawn from this account, with approval of the parliament, 
for extrabudgetary expenditures such as compensation for the 
Central Bank of Iran's claims on the government, repayment of 
matured government debts, and compensation to farmers for 
drought years. 

Government Expenditures 

A general trend toward increased government expenditures 
began in FY 1972. By FY 2004, total government expenditures 
had increased more than sevenfold, from US$4.5 billion to 
US$34 billion. Government expenditures may be divided into 
two groups: current, or operating, expenditures and capital, or 
development, expenditures. These two types of expenditure 
are distributed among four payment categories: general affairs, 
national defense, social affairs, and economic affairs. Within 
the development plans, government priorities reflected in bud- 
get law influence fluctuations in the relative share of each pay- 
ment category. Because of changes in the classification of 
budgetary figures, comparison of categories among different 
years is not possible. However, since the Revolution the govern- 
ment's general budget payments have averaged 59 percent for 
social affairs, 17 percent for economic affairs, 15 percent for 
national defense, and 13 percent for general affairs. (For a 
breakdown of expenditures for social and economic purposes, 
see fig. 10.) The balance of the FY 2004 operating budget 
showed a deficit of about US$10 billion, 15.3 percent more 
than the FY 2003 operating budget. The main reasons for defi- 



193 



Iran: A Country Study 



Agriculture 

3% 




Source: Based on information from Iran, Statistical Center of Iran, Iran Statistical Year- 
book 1383 [2004-5], Tehran, 2006. 

Figure 10. National Budget Expenditures for Social and Economic 
Purposes, Fiscal Year 2004 

cit growth were an increase in the projected operating budget 
and a concurrent reduction of tax revenue from public enter- 
prises and corporations. During FY 2004, total government 
development expenditures were about US$6.8 billion. 

In FY 2004 central government expenditures were divided as 
follows: current expenditures, 59 percent, and capital expendi- 
tures, 32 percent. Other items (earmarked expenditures, for- 
eign-exchange losses, coverage of liabilities of letters of credit, 
and net lending) accounted for the remainder. Among current 
expenditures, wages and salaries accounted for 36 percent; sub- 
sidies and transfers to households accounted for 22 percent. 
Earmarked expenditures totaled 13 percent of the central gov- 
ernment total. Between FY 2000 and FY 2004, total expendi- 
tures and net lending accounted for about 26 percent of GDP. 

Banking and Monetary Policy 

Structure of the Banking System 

In 1960 the Central Bank of Iran (CBI, also known as Bank 
Markazi) was established as a banker for the government, with 



194 



The Economy 



responsibility for issuing currency. In 1972 legislation further 
denned the CBFs functions as a central bank responsible for 
national monetary policy. In the 1960s and 1970s, the expan- 
sion of economic activity fueled by oil revenues increased 
Iran's financial resources, and subsequently the demand for 
banking services increased exponentially. By 1977, some 36 
banks (24 commercial and 12 specialized) with 8,275 branches 
were in operation. 

After the Revolution, the government nationalized domestic 
private banks and insurance companies. Bank law was changed 
under new interest-free Islamic banking regulations. The post- 
Revolution reduction in economic activity and financial 
resources required banks to consolidate. By 1982, this consoli- 
dation, in conformity with the Banking Nationalization Act, 
had reduced the number of banks to nine (six commercial and 
three specialized) and the number of branches to 6,581. Subse- 
quently, the system expanded gradually. 

The banking system in Iran plays a crucial role in transmit- 
ting monetary policy to the economic system. Each year, after 
approval of the government's annual budget, the CBI presents 
a detailed monetary and credit policy to the Money and Credit 
Council (MCC) for approval. Thereafter, major elements of 
these policies are incorporated in the five-year economic devel- 
opment plan. 

In 2005 the Iranian banking system consisted of a central 
bank, 10 government-owned commercial and specialized 
banks, and four private commercial banks. In 2004 there were 
13,952 commercial bank branches, 53 of which were foreign 
branches. Specialized banks had 2,663 branches. The CBI is 
responsible for developing monetary policy, issuing currency, 
and regulating national clearing and payment settlement sys- 
tems. Commercial banks are authorized to accept checking 
and savings deposits and term investment deposits, and they 
are allowed to use promotional methods to attract deposits. 
Term investment deposits may be used by banks in a variety of 
activities such as joint ventures, direct investments, and limited 
trade partnerships (except to underwrite imports). However, 
commercial banks are prohibited from investing in the produc- 
tion of luxury and nonessential consumer goods. Commercial 
banks also may engage in authorized banking operations with 
state-owned institutions, government-affiliated organizations, 
and public corporations. The funds received as commissions, 



195 



Iran: A Country Study 



fees, and returns constitute bank income and cannot be 
divided among depositors. 

In FY 2004 the balance sheet of the banking system showed 
that total assets and liabilities were US$165 billion, an increase 
of 226 percent since 1976. In that year, bank assets were divided 
as follows: private debt, 34 percent; government debt, 16 per- 
cent; and foreign assets (90 percent foreign exchange), 22 per- 
cent. Liquidity funds (money and quasi-money) accounted for 
more than 39 percent of total liabilities. 

The Stock Exchange 

The Tehran Stock Exchange is the main stock exchange of 
Iran. It began operation in 1968, dealing in shares from a small 
range of private banks and industries as well as government 
bonds and securities. The volume of transactions increased 
sharply during the 1970s as oil revenues grew, then shrank 
drastically after the Revolution's nationalization of banks and 
enterprises in 1979, followed by the Iran-Iraq war of 1980-88. 
In the 1990s, limited economic reform and privatization 
spurred substantial growth, interspersed with temporary rever- 
sals. The early 2000s saw another rapid expansion. Between 
1996 and 2007, the number of companies listed on the 
exchange increased from 164 to 364. 

Nevertheless, ongoing tight state control, large-scale ineffi- 
ciency in the economy, and the high risk associated with for- 
eign investment in Iran continued to limit the growth potential 
of the Tehran Stock Exchange. In 2007 that exchange 
remained smaller (total valuation US$42 billion) and less 
broad than all the major world stock exchanges. More than 
half of the capitalization is from heavy industry enterprises 
(automotive, chemicals, and metals), and foreign participation 
is minor. The Tehran Stock Exchange is directly under the con- 
trol of the Iranian government, by virtue of the fact that the 
chairman of its High Council is the governor of the state- 
owned Central Bank of Iran. The bank's deputy 7 governor also 
heads the exchange's board of directors. In 2005 fewer than 0.1 
percent of Iran's registered companies were listed on the 
Tehran Stock Exchange, and fewer than 5 percent of Iranians 
owned stock. An ongoing modernization project aims at 
expanding the exchange's listings and improving transparency, 
in order to increase foreign investment. A set of exchange laws, 
heretofore lacking in Iran, have been proposed. 



196 



The Economy 



Efforts to Control Prices and Inflation 

In the late 1990s and early 2000s, inflation rates were high in 
Iran for several reasons: an increase in the volume of liquidity 
with respect to GDP growth, an increase in the level of imports 
and a decrease in the terms of trade, an increase in public and 
private spending, and fluctuations in oil export revenues. Since 
its establishment in 1960, the CBI has regularly published price 
indices on GDP deflators, consumer goods, and wholesale 
products. The price development indices published by the 
bank do not always reflect the true picture of price changes, 
because markets are regulated and controlled by other coun- 
tries' governments. The highest inflation, averaging 23 percent 
per year, occurred between FY 1977 and FY 1998. The inflation 
rate in FY 2006 was 15.8 percent. 

International Trade and the Balance of Payments 

Iran's international trade began a trend of consistent growth 
in the early 1920s, with imports competing freely in the domes- 
tic market. Trade expansion had several consequences. First, 
the growth of transportation infrastructure outpaced domestic 
production. This development reflects the need for infrastruc- 
ture improvements required for oil and gas exports, and the 
subsequent import of goods and services. Second, the need for 
distribution channels for consumer goods led to the emer- 
gence of a small group of wealthy traders with both economic 
and political power. Third, with the growth of imports and 
domestic trade, financial services rapidly expanded to facilitate 
trade-related activities. Banks and insurance companies with 
foreign-exchange branches first grew in response to public and 
private foreign trade; their services later became available to 
manufacturers to facilitate the import of parts and machinery. 
Fourth, the significant volume of trade made import duties a 
major source of government revenue. This resulted in the 
emergence of sophisticated trade laws, import duty standards, 
and government offices specializing in imports and foreign 
trade. After numerous rejections for membership in the World 
Trade Organization, beginning in 1996, in mid-2005 Iran was 
approved for observer status, which could last for several years. 
In 2006 the United States set modification of Iran's nuclear 
program as a condition for full membership (see International 
Reactions to Iran's Nuclear Program, ch. 5). 



197 



Iran: A Country Study 



Imports 

In FY 2006 Iran's international trade volume, including oil 
and gas, was estimated at US$109 billion. Imports totaled 
US$45 billion (about 23 percent of GDP) and total exports 
about US$63 billion (about 32 percent of GDP). Thus, the 
overall trade surplus was about US$18 billion. The surplus was 
diminished by a hydrocarbon deficit of US$32.7 billion. 
Between 2000 and 2005, Iran's imports increased by 189 per- 
cent. According to an Iranian government report, nonhydro- 
carbon exports increased by 43 percent in 2006 after reaching 
a record high of US$12 billion in 2005. 

The value and composition of imports have shifted with 
time, reflecting a change in both policy and oil revenues. The 
end of the Iran-Iraq War in 1988 coincided with a change in 
Iranian trade and foreign-exchange policies and the introduc- 
tion of a new economic development plan. Thus, some 
imported goods received preferential foreign-exchange rates, 
as did public and private business enterprises. A change in valu- 
ation methods and bureaucratic processes also made it easier 
to import parts and finished products. Between 1989 and 2004, 
import volume increased from 19.2 million tons (worth US$13 
billion) to 30 million tons (worth US$27 billion). This rise, rep- 
resenting more than a twofold increase at constant prices, mir- 
rored the increase in oil earnings over the same period. During 
that period, the value of imported goods per ton grew consid- 
erably. 

Prior to 1979, Iran relied on industrialized countries for 
imported commodities. Countries of the European Commu- 
nity (EC; now the European Union — EU) accounted for 43 
percent of the total, with West Germany, the United Kingdom, 
and Italy responsible for 74 percent of the EC portion. Since 
that time, import composition has shifted in response to 
changes in economic structure and trade policy, linkages 
between industries, consumption patterns in the public and 
private sectors, and the political climate. From 1997 to 2005, 
the average volume of imports of raw materials and intermedi- 
ate goods declined to their lowest level since 1963. The share of 
imported consumer goods also had declined significantly since 
1990. A factor in this trend is a significant increase in smug- 
gling into Iran that began in the 1990s. Although no official 
statistics on illegal imports are available, official estimates of 
their value during FY 2003 varied between US$2 billion and 
US$9 billion. Since 1995, illegal low-priced imported consumer 



198 



The Economy 



goods have become a major problem for legitimate traders, 
domestic producers, and government officials. 

As the proportion of consumer goods imports decreased, 
capital goods imports increased, reaching their highest-ever 
share level of 38 percent between 1997 and 2004. The 
increased share of imported capital goods may suggest that 
domestic manufacturing industries were unable to produce the 
tools and machinery needed for growth by the public and the 
private sectors. It also may suggest that the domestic currency 
was losing purchasing power while the values of major curren- 
cies were artificially held below true market value. 

In 2005 a wide variety of goods were imported; chiefly food 
and tobacco, industrial raw materials and intermediate com- 
modities, chemicals, other raw materials and intermediate 
commodities, and transport equipment and machinery. Since 
1989 there has been a pronounced change in the origin of 
imports. The share of the EU remained high, at 40 percent; 
however, by 2004 Japan's share declined to 4 percent. Mean- 
while, China and the Republic of Korea (South Korea) aggres- 
sively pursued the Iranian market, each exceeding Japan's 
share of total imports in 2005. Among the EU states, Italy and 
Germany in particular emerged as strong exporters to Iran, 
surpassing both Japan and the United Kingdom (see table 10, 
Appendix) . 

Nonoil Exports 

Any interruption of imports would significantly affect the 
daily lives of Iranians, for whom foreign goods have become 
essential. Trade disruption would not, however, cause foreign 
consumers to miss many of Iran's nonoil exports. Industrial 
goods exports from Iran have been limited to only a few items 
that are exchanged primarily through barter agreements. His- 
torically, agricultural products and carpets have made up a 
major portion of nonoil exports in international markets at 
competitive prices (see table 11, Appendix). However, since 
the 1990s, the Iranian government and the private sector have 
marketed Iranian nonoil exports aggressively, significantly 
increasing the sale of those goods. Between 1998 and 2004, 
nonoil exports averaged about US$5.1 billion per year, with 
industrial goods holding a 52 percent share. In FY 2005 the 
value of nonoil exports totaled US$10.7 billion. Of that 
amount, 42 percent was contributed by the sale of industrial 
exports, including chemical, petrochemical, and metal prod- 



199 



Iran: A Country Study 



ucts. The export share of agriculture was 18.4 percent, tourism 
16.0 percent, and mining and metals 11.8 percent). 

Despite an increase in nonoil exports, foreign market pene- 
tration has proven difficult for Iran's goods and services. In the 
early 2000s, nonoil exports averaged only 20 percent of total 
exports. In this period, the export of durable manufacturing 
goods remained especially problematic. For example, in FY 
2005 the export of home appliances was less than 1 percent of 
domestic production. In the early 2000s, obstacles to increased 
nonpetroleum exports included income and price inelasticity 
of exportable industrial goods and the lack of infrastructure 
(such as permanent trade offices overseas and special financial 
facilities) on which to base expanded activities. Because of 
these factors, economic growth among Iran's trading partners 
did not necessarily increase their demand for Iranian goods, 
and domestic currency depreciation has not increased export 
revenues. Beginning in 2006, Iran's Khodro automotive com- 
pany pursued an aggressive export strategy for its new passen- 
ger car model, the Samand. 

Although Iran has relied on industrial countries for imports, 
export sales have been concentrated in a different group of 
countries and have shifted with time. Prior to 1979, the EU's 
share of Iran's nonoil exports was 30 percent, that of China 
and the Soviet Union (in the form of barter trade) was 29 per- 
cent, and that of the Organization of the Petroleum Exporting 
Countries (OPEC — see Glossary) countries was 9.7 percent. 
During 1980-88, the EU's average share increased to 41 per- 
cent, while political instability in Eastern Europe reduced bar- 
ter trade with Iran by the countries of that region to 9 percent. 
In this period, Germany and Italy remained major importers of 
the country's nonoil exports. Beginning in 1995, the EU's 
share declined to 15 percent, while the share of OPEC nations 
increased to 18 percent. Between 2002 and 2005, Japan was 
Iran's largest customer, importing an average of 19 percent of 
the country's total nonoil exports; the next-largest customers 
were China (10 percent) and Italy (6.4 percent) (see table 10, 
Appendix) . 

Balance of Payments and Debt 

Although Iran's foreign-exchange balance has fluctuated 
primarily in response to oil revenues, the demand for foreign 
exchange (for imports and services) typically has exceeded the 
funds available. Beginning in 1990, foreign-exchange payment 



200 



The Economy 



statistics showed continuous increases with relatively few fluctu- 
ations in payments; foreign-exchange receipts varied primarily 
in relation to export volume and the prices of crude oil. For 
example, in 1998, following a reduction in the global demand 
for crude oil, Iranian oil revenue declined by 36 percent while 
imports increased slightly, resulting in a current account deficit 
of US$2.1 billion. In the other years between 1995 and 2004, 
increased oil revenue yielded a trade surplus, and both foreign- 
exchange receipts and foreign reserves increased continuously. 
The current account also was affected by nonoil exports and 
services, although to a lesser degree. In 2006 the current 
account surplus was US$13.3 billion. Between 1991 and 2004, 
the value of nonoil exports increased from US$1 billion to 
US$7 billion, 2.9 times faster than the value of oil exports dur- 
ing that period. Within the services account, travel receipts 
increased from US$61 million to US$1.4 billion, and travel pay- 
ments from US$340 million to US$2.6 billion. Payments on 
investment income increased from US$157 million to US$1.2 
billion. 

Iran's capital account has shown more fluctuations than the 
current account balance because of short-term and long-term 
foreign borrowing, debt service payments (principal and inter- 
est) on international loans, and the current account status. 
After continuous growth during the previous five years, in mid- 
2006 the total amount of foreign debt was about US$18.6 bil- 
lion. Of that amount, US$8.2 billion was short-term debt. 
Because financial market transactions are limited in Iran, liabil- 
ities are limited, and data on private-sector investment in for- 
eign securities are also not available. In 2006 high oil prices 
raised Iran's foreign currency holdings to US$58.5 billion. 

The Foreign-Exchange System 

After the Revolution, Iran adopted a complex multiple 
exchange-rate system, under which the Exchange Allocation 
Commission allocates foreign-exchange receipts (including 
nonoil exports and services) for government, commercial, and 
noncommercial purposes. The official basic rate of the rial (see 
Glossary) is pegged to the International Monetary Fund (IMF) 
special drawing right (see Glossary) without a link to the U.S. 
dollar. Since 1991 Iran's multiple exchange-rate system has 
been simplified and modified several times, reflecting interna- 
tional trade policy reforms and stable foreign-exchange 
receipts. For example, in 2000 external-sector policies aimed at 



201 



Iran: A Country Study 



creating transparency in the foreign-exchange market, reduc- 
ing trade barriers, and easing conditions for nonoil exports. In 
the early 2000s, foreign-exchange policy continued to focus on 
moving toward a unified managed exchange-rate system and 
elimination of the multiple rates system. By 2006 gross interna- 
tional reserves had increased from US$12.1 billion to an esti- 
mated US$58.5 billion. 

Foreign Direct Investment 

Foreign direct investment (FDI) in Iran may be divided into 
the oil and gas industry and investment in other economic 
activities, including nonoil mining. Since the discovery of oil in 
Iran in the early twentieth century, exploration, extraction, and 
refining have been the major sources of FDI. Prior to 1979, 
such investments were arranged according to particular oil 
concession agreements or treaties. After the Revolution, the 
terms of such agreements between Iran and international com- 
panies changed, causing a temporary reduction in oil and gas 
investment. Although growth resumed in 1988, FDI in other 
sectors failed to reach pre-Revolution levels. 

Low FDI has resulted from ambiguity in business laws, lim- 
ited availability of credit, weak private-sector presence, political 
issues with FDI, and an unfavorable international political cli- 
mate. In 2003 the approval of foreign investment in the Tehran 
Stock Exchange increased capital mobility and improved Iran's 
potential to attract foreign investment. Since that time, 
increased capital mobility within the Middle East has enabled 
Iran to attract more regional financial resources. 



* * * 



Although there have been many books in Persian and other 
languages analyzing the social, political, and cultural changes 
since the 1978-79 Revolution, no equivalent texts in any lan- 
guage deal with Iran's economic issues. In the case of eco- 
nomic statistics, the situation is the opposite. The international 
economic institutions, particularly the IMF, provide systematic 
statistics as well as some analysis on different aspects of the Ira- 
nian economy. The IMF's International Financial Statistics Year- 
book, available in hard copy and on line, provides financial 
market statistics regularly. The Web sites of the Tehran Times 



202 



The Economy 



and Payvand Iran News provide statistics and short articles on 
current economic issues. Gooya.com provides access to Iranian 
daily newspapers and periodicals in English and Persian. Other 
sources are the Economist Intelligence Unit's annual country 
profile on Iran, the Middle East Economic Digest, and the Middle 
East Research and Information Project (MERIP). 

In Iran several official sources of statistics and analysis in Per- 
sian and English are available in print and on the Internet. The 
Economic Research and Policy Department of the Central 
Bank of Iran (Bank Markazi) provides annual and quarterly 
reports {Economic Trends) and other publications in English 
that deal with economic issues and economic policies via its 
Web site. Its annual Economic Report and Balance Sheet is an indis- 
pensable resource for recent and historical data. This report 
also discusses recent economic trends and policies and pro- 
vides comprehensive statistical data in its appendix. In addi- 
tion, its annual publication National Accounts provides current 
and historical statistics on national and income accounts, and 
its annual Household Budget Survey provides unique information 
on urban-area household budgets in Iran by year. The Central 
Bank of Iran's The Law of Usury (Interest) Free Banking provides 
information on the banking system and its role and objectives 
in Iran and will complement The Monetary and Bank Law of Iran, 
also published by the bank. The Management and Planning 
Organization, part of the Statistical Center of Iran (SCI), is 
another excellent source of economic and social statistics. The 
SCI provides historical census data and the most recent data 
provided by government agencies and departments in its 
annual report, Iran Statistical Yearbook. The SCI also provides 
special census and survey data such as the Census of Agriculture 
and Household Survey. The entire data set is available in Persian 
and English on its own Web site. Since 2001 the state Manage- 
ment and Planning Organization's annual Economic Report has 
provided helpful annual publications on the performance of 
development plans. 

Ervand Abrahamian's Iran Between Two Revolutions is a very 
valuable book on Iran's political economy in the twentieth cen- 
tury. Jahangir Amuzegar's Iran 's Economy under the Islamic Repub- 
lic is a comprehensive analysis of post-Revolution economic 
trends and policy initiatives, particularly during the period 
1980-92; it includes detailed projected outcomes. Eric Hoog- 
lund's Land and Revolution in Iran, 1960-1980 is a classic work 
on the social structure of rural areas and land reform issues. 



203 



Iran: A Country Study 

Philip Parker's The Economic Competitiveness of Iran provides busi- 
ness indicators on productivity, costs, and revenues of Iranian 
industries in comparison with those of the Middle East and 
elsewhere in the world. (For further information and complete 
citations, see Bibliography.) 



204 



Chapter 4. Government and Politics 




Two men who came to pay tribute to Darius, ca. 500 B. C, from a bas-relief at 
Persepolis 



THE ISLAMIC REVOLUTION OF 1978-79 brought dramatic 
change to the political atmosphere of Iran. Prior to the Revolu- 
tion, the nation's government was a secular, pro-Western mon- 
archy allowing substantial social liberties but using a strong 
security agency to maintain increasingly tight control over 
opposition forces. In the wake of the Revolution, Iran was 
transformed into a theocratic state whose fundamental law was 
that of the national religion and whose most influential govern- 
ment leaders were senior religious figures. In the decades fol- 
lowing, the fundamental form of governance remained the 
same, but substantial struggles persisted over the day-to-day dis- 
tribution of power and the roles of government agencies. 

Beginning with its inception in early 1979, Iran's Islamic 
regime passed through five distinct phases before a surprising 
presidential election in 1997 altered the tone of governance 
more decisively (see Bazargan and the Provisional Govern- 
ment; The Bani Sadr Presidency; Terror and Repression; Con- 
solidation of the Revolution; and The Rafsanjani Presidency, 
ch. 1). During that period, the regime's evolution was driven by 
the changing attitudes of the Iranian people and the strategies 
pursued by key leaders. Behind these factors stood more funda- 
mental elements: changing social and economic conditions, 
the character of Iran's political institutions, and the interna- 
tional environment as seen from the Iranian perspective. 

The unexpected election of Mohammad Khatami as presi- 
dent in May 1997 inaugurated a new phase of political liberal- 
ization, an eight-year period in which major political changes 
occurred. The changes advocated by the pro-Khatami politi- 
cians, who positioned themselves as reformists, threatened the 
power and status of many conservative political leaders. Follow- 
ing a period of disarray after the 1997 election, the conserva- 
tives gradually regrouped and began to use the courts to 
challenge and stymie reform initiatives. The conservatives took 
control of the parliament in the 2004 elections; a year later, a 
conservative candidate, Mahmoud Ahmadinejad, won a land- 
slide victory in the presidential election. With his inauguration 
in August 2005, the political liberalization phase officially came 
to an end, and a new one, perhaps a phase of pragmatic 
authoritarianism, began. 



207 



Iran: A Country Study 



Political Dynamics 

A Reformist Comes to Power 

In the presidential election of 1997, trends such as the for- 
mation of a centrist association of lawmakers called the Execu- 
tives of Construction and the coalescing of progressive and 
democratic politicians around a reform agenda converged to 
catalyze the landslide victory of prominent reformist Moham- 
mad Khatami. Khatami's unexpected election energized his 
supporters and led to the formation of two main political blocs, 
the reformists and the conservatives. Initially, there was a 
period of optimism and rapid change that some observers lik- 
ened to the "Prague Spring" of 1968 in Czechoslovakia. 
Khatami named a reformist-dominated cabinet that soon was 
approved by the conservative-controlled parliament, demon- 
strating the powerful impact of his electoral victory. During his 
first few months in office, Khatami indicated that he intended 
to seek far-reaching political liberalization. The most impor- 
tant manifestation of this liberalization was a loosening of 
restrictions on the news media, which resulted in the emer- 
gence of a series of newspapers that strongly criticized the con- 
servatives and even challenged the concept of velayat-e faqih 
(guardianship of the religious jurisprudence expert; see Glos- 
sary) , the governing principle of the Islamic Republic of Iran 
(see Khatami and the Reform Movement, ch. 1). Khatami also 
broke an important taboo by calling for improved relations 
with the United States (see The United States and Iran, this 
ch.). Some Iranians responded to this looser atmosphere by 
challenging political and even cultural restrictions that had 
existed since 1979 — speaking more openly about politics, inter- 
preting Islamic dress codes less strictly, and stretching or ignor- 
ing gender roles. 

Conservatives Strike Back 

The conservatives responded to liberalization with vigilante 
attacks against reformist leaders, lawsuits, forced resignations, 
and the closing of reformist newspapers. Despite these set- 
backs, the reformist position was strong enough to achieve the 
relaxation of regulations for the establishment of political par- 
ties. Eighteen parties joined to form the reformist Second of 
Khordad coalition, named after the Iranian calendar date of 
Khatami's election (May 23, 1997). A large number of reform- 



208 



Government and Politics 



ist clerics registered to contest the October 1998 elections for 
the Assembly of Experts, a body charged with selection and 
oversight responsibilities regarding the Leader (see The 
Leader or Faqih; The Assembly of Experts, this ch.). The cre- 
dentials of most, however, were rejected by the Guardians 
Council, a body empowered to oversee the electoral process 
(see The Guardians Council, this ch.), ensuring a victory for 
the conservatives. The reformists' call for the creation of local 
legislative councils, which had been mandated in the constitu- 
tion but never established, gained strong public support and, 
in 1998, parliamentary approval. Consequently, in February 
1999 all cities and villages held local council elections. Reform- 
ists swept these elections amid a very high turnout, delivering 
another strong electoral mandate for the reformist movement. 

Nevertheless, in early 1999 vigilantes continued to assault 
leading reformists at public functions; the judiciary arrested 
several reformists on dubious libel charges; parliament tried 
unsuccessfully to impeach Ataollah Mohajerani, the minister of 
culture and Islamic guidance who had virtually ended govern- 
ment press censorship; prosecutors arrested 13 Iranian Jews on 
charges of espionage; parliament gave preliminary approval to 
a bill imposing sharp limits on the press; and the judiciary 
closed down two popular newspapers. 

The Power Struggle Intensifies 

In July 1999, police and vigilante attacks on student demon- 
strators at Tehran University led to riots in several districts of 
Tehran. Khatami banned demonstrations, but the protests con- 
tinued. In reaction, a group of commanders of the Islamic Rev- 
olutionary Guard Corps threatened a coup d'etat against 
Khatami (see The Islamic Revolutionary Guard Corps (IRGC), 
ch. 5). Hundreds of protesters were injured, and some 1,400 
were arrested before order was restored. 

Khatami stated that he would address the protesters' con- 
cerns and crack down on vigilantes, but he also reaffirmed his 
support for Iran's Leader, Sayyid Ali Khamenei, who charged 
that foreign enemies of Iran had instigated the demonstra- 
tions. Many protesters received long prison terms. However, 
Khamenei replaced the conservative judiciary chief Ayatollah 
Mohammad Yazdi with Ayatollah Mahmoud Hashemi Shah- 
rudi, who promised to reform the judiciary. 

In preparation for the February 2000 parliamentary elec- 
tions, the Second of Khordad coalition registered slates of mul- 



209 



Iran: A Country Study 



tiple candidates to thwart potential Guardians Council vetoes. 
The conservatives in the judiciary and parliament closed 
reformist newspapers, raised the voting age from 15 to 16 to 
reduce the youth vote, and arrested Abdullah Nuri, the most 
popular reformist candidate, on spurious charges. When 
former president Ali Akbar Hashemi Rafsanjani announced his 
candidacy for one of the 30 at-large seats in Tehran, the major 
conservative political organizations backed him, hoping that 
he would be named speaker and thus prevent the reformists 
from taking control of that office. Despite the backing of the 
centrist Executives of Construction, Rafsanjani failed to gain 
reformist support (see The Centrist Faction, this ch.). 

Because the Guardians Council unexpectedly vetoed only a 
small number of candidates, the Second of Khordad coalition 
achieved a decisive victory in the elections, winning 71 percent 
of the seats filled in the first round, while conservatives won only 
21 percent. More women and fewer clerics won seats than in the 
1996 parliamentary elections, and voter turnout was 80 percent. 
These results mirrored those of the 1997 presidential election 
and the 1999 local council elections, confirming that the reform- 
ist movement enjoyed overwhelming popular support. 

The Reformists Retreat 

When the new parliament convened in May 2000, it elected 
as its speaker the moderate reformist cleric Mehdi Karrubi. 
Karrubi quickly unveiled a broad agenda of reforms, starting 
with revision of the press law passed by the previous parlia- 
ment. Khamenei then publicly opposed revision of the press 
law, and the judiciary closed several more newspapers and 
arrested several journalists on libel charges. Parliament never- 
theless began work on a revised press law, leading Khamenei to 
demand that it cease its efforts. Karrubi reluctantly complied, 
provoking strong protests from some reformists. In the follow- 
ing months, the judiciary closed more newspapers and arrested 
more journalists. It pressed libel charges against numerous 
reformist leaders, including several members of parliament, 
despite their constitutional immunity from prosecution. These 
actions demonstrated that the conservatives were determined 
to stop the reformists and that the judiciary remained a potent 
weapon in their arsenal. 

In blocking liberalization, the conservatives also drew upon 
the powers of the Guardians Council, which, in addition to vet- 
ting political candidates, was empowered to vet laws passed by 



210 



Sayyid Ali Khamenei 
(Leader, 1989-) 
Courtesy Iran Interests Section, 
Embassy of Pakistan, 
Washington, DC 




the parliament. The conservatives' success in blocking reform 
and the reformists' inability to challenge them left the Iranian 
public — especially young people — increasingly disappointed 
with Khatami and his allies. In addition, new laws embodying 
neoliberal economic reforms often had cost jobs in newly priva- 
tized industries. They also had reduced the incomes of farmers, 
who had come to depend on subsidies that the reformists had 
reduced or rescinded. As a result, the reformist coalition began 
to fray after the 2000 parliamentary elections. Many student 
leaders and some older reformists called for a more confronta- 
tional approach or even a break with Khatami, while low- 
income groups abandoned the reformists en masse (see Gov- 
ernment Institutions; Political Parties and Civil Society, this ch.). 

The reformist leadership pursued a strategy of "active calm" 
during this period, pressing firmly for reform but avoiding con- 
frontational actions that might give the conservatives a pretext 
for cracking down even further. The main political arena now 
was parliament, which passed legislation on matters such as the 
status of political crimes, defendants' rights, prison conditions, 
press protection, and reform of the intelligence division of the 
Ministry of Information and Security. However, in this period 
the Guardians Council vetoed or sharply diluted all major 



211 



Iran: A Country Study 



reform legislation, and the Expediency Council (in full, the 
Council for the Discernment of Expediency; the organization 
empowered to mediate disagreements between parliament and 
the Guardians Council) generally backed these decisions. With 
the reformist leadership seemingly powerless to advance its 
program, fissures began to emerge in the Second of Khordad 
coalition and the main reformist student organization, the 
Office for Consolidating Unity. Some reformists became 
increasingly critical of Khatami, Karrubi, and other moderates 
and openly questioned whether the Islamic regime could be 
reformed. 

Frustrated by his lack of power, Khatami entered the June 
2001 presidential election only at the last minute. The Guard- 
ians Council disqualified all but 10 of the 814 registered candi- 
dates. Khatami's nine opponents spanned the range of 
conservative opinion. Khatami again scored a decisive victory, 
winning 77 percent of the vote, although voter turnout fell to 
67 percent from the 83 percent level of the 1997 presidential 
election. 

Khatami's Second Term 

Khatami's re-election had little impact on the power struggle 
between reformists and conservatives. The Second of Khordad 
coalition continued to pursue its "active calm" strategy, working 
mainly through parliament to promote reform and avoiding 
confrontation. The conservatives continued their attacks on 
the press and the reformist politicians, blocking political 
reform initiatives but supporting many economic reform poli- 
cies. In the fall of 2001, the judiciary brought charges against 
reformist members of parliament, issuing summonses for 60 
members to appear in court. In response, Khatami issued a 
statement warning the judiciary that this move violated the 
constitution, and some reformist leaders called for a referen- 
dum on the matter. A constitutional crisis was averted when 
Khamenei intervened, compelling the judiciary to back down 
and respect parliamentary immunity. 

Throughout 2002, the judiciary continued to bring charges 
against reformist leaders and closed more reformist newspa- 
pers. In July it convicted 30 members of the Iran Freedom 
Movement, a reformist group that predated the Revolution, on 
charges of plotting to overthrow the Islamic regime and 
banned the organization. The reformists' ongoing failure to 
achieve their political goals despite their electoral success 



212 



Government and Politics 



increased frustration among reformist leaders and their sup- 
porters; President Khatami even talked openly about resigning. 
Reformists favoring a more proactive approach called for con- 
frontation with the conservatives and threatened to break with 
Khatami and the moderates. Common Iranians, many of whom 
were beginning to experience the negative consequences of 
the economic reforms, increasingly expressed disappointment 
with the reformists' agenda and declared that they no longer 
would vote for them. 

In the February 2003 local council elections, reformist candi- 
dates in Tehran and other major cities were defeated decisively, 
although most were reelected in small towns and rural areas. A 
new conservative party, the Islamic Iran Builders Council, por- 
trayed itself as pragmatic and apolitical during the campaign 
and swept the Tehran council elections, although voter turnout 
was only 12 percent of the electorate in the city. Elsewhere, 
voter turnout fell from a national average of 57 percent in 1999 
to 29 percent. In general, voter turnout was higher in rural dis- 
tricts than in large cities, reflecting stronger public interest in 
races that were less politicized and where local councils made 
decisions on issues that voters deemed important. 

Especially in Tehran, the results of local council elections 
emboldened the conservatives and left the reformists frus- 
trated and divided. In the following months, the Guardians 
Council vetoed two bills Khatami had proposed, aimed at weak- 
ening the Guardians Council powers and strengthening those 
of the presidency. The Expediency Council sharply increased 
the Guardians Council's budget, enabling it to set up a nation- 
wide network of election-monitoring offices. The judiciary 
arrested more reformist leaders, closed more newspapers, and 
began to block reformist Internet sites. Security personnel and 
vigilantes again attacked student protesters. In a rare triumph 
for the reformists, human rights lawyer Shirin Ebadi won the 
Nobel Peace Prize in October and quickly began to use her 
high-profile position to promote political and civil rights 
reforms. 

The growing popular disenchantment reflected in the Feb- 
ruary 2003 local council elections prompted Khatami and the 
reformists to focus on economic development programs, but 
the efforts were too late to bear fruit before the 2004 parlia- 
mentary elections. A total of 8,144 candidates, most of them 
affiliated with a reformist party, registered to compete. In early 
January 2004, the Guardians Council disqualified 44 percent of 



213 



Iran: A Country Study 



the registered candidates, including almost every prominent 
reformist and 80 incumbent members of parliament. Under 
pressure from Khamenei, the Guardians Council reinstated 
1,075 (30 percent) of the candidates it originally had disquali- 
fied, although no prominent reformists were among them. Of 
210 incumbent deputies in parliament, a total of 75 remained 
disqualified, including President Khatami's brother. 

The End of the Khatami Era 

The first round of the parliamentary elections occurred on 
February 20, 2004, with more than 5,600 candidates competing 
for 290 seats. Karrubi, one of the few nationally known reform- 
ists who had not been disqualified, organized a nationwide list 
of 220 reform candidates, the Coalition for All Iran, but no one 
on the list won a seat. In all, only 39 reform candidates won in 
the first round and nine more in the second round, giving the 
reform bloc 17 percent of the total seats. The conservative 
Islamic Iran Builders Council was the big winner, picking up 
154 seats in the first round and adding 43 in the second round 
to obtain a 68 percent majority in the parliament. The remain- 
ing 15 percent of seats were distributed among independents, a 
majority of whom were more conservative in their political 
views than the Islamic Iran Builders Council. Overall voter 
turnout was 51 percent, with higher participation rates in small 
towns and villages than in large cities. 

The 2004 elections marked the end of Khatami's efforts to 
promote political reform and the beginning of a new era of 
conservative domination, inaugurated when the new parlia- 
ment convened in late May and elected as its speaker the head 
of the Islamic Iran Builders Council, Gholam Ali Haddad Adel, 
who had led a small conservative bloc in the 2000-4 parlia- 
ment. Adel's declared intention was to concentrate on improv- 
ing the economy, and under his tutelage the parliament 
enacted several economic programs that restricted or reversed 
the neoliberal economic reforms enacted by the previous par- 
liament. But conservatives both in the parliament and the judi- 
ciary also continued to focus on their reformist opponents. 
The judiciary began another crackdown on Internet sites and 
banned several more newspapers. A number of prominent 
reformist politicians and student leaders were arrested. The 
parliament approved three conservative nominees for the 
Guardians Council, including one who had been rejected twice 
by the previous parliament. In August Khamenei reappointed 



214 



Government and Politics 



judiciary head Shahrudi and three members of the Guardians 
Council, signaling his approval of their records. The parlia- 
ment challenged the authority of two cabinet ministers and 
approved a no-confidence measure against another. It also 
placed heavy restrictions on foreign investment, revised the 
five-year development plan passed by the previous parliament, 
and began efforts to put the Ministry of Information and Secu- 
rity under control of the judiciary. 

In the run-up to the June 2005 presidential election, two 
main reformist candidates emerged: Mostafa Moin, a former 
cabinet minister, and Mehdi Karrubi. Many centrists backed 
former president Rafsanjani. Several conservative candidates 
emerged, including Ali Larijani, who resigned as head of Iran's 
state radio and television service; Mohammad Qalibaf, chief of 
the national police; and Mahmoud Ahmadinejad, who had 
served in the Islamic Revolutionary Guard Corps during the 
Iran-Iraq War, was elected to the Tehran city council in 2003, 
and later was chosen the capital's mayor. 

Of the six candidates, Rafsanjani won a plurality in the June 
17 balloting, but he got only 21 percent of the total. Ahmadine- 
jad, who had conducted a populist campaign, narrowly gained 
second place by outpolling Karrubi, 19 percent to 17 percent. 
Because no candidate obtained a majority, a second round of 
balloting was held between the two highest vote-getters. In the 
June 24 second-round vote, most reformists unenthusiastically 
backed Rafsanjani because they feared that Ahmadinejad 
might win. Ahmadinejad stepped up his populist message, 
downplaying his conservative political views, promising to help 
the poor and to fight corruption, and repeating the theme that 
it was time for a new generation with fresh ideas to come to 
power. Iranian voters responded to these themes by strongly 
backing Ahmadinejad, who won 62 percent of the second- 
round vote. Ahmadinejad's victory was not only a decisive 
defeat for Rafsanjani but also for the "establishment" of conser- 
vative and reformist politicians who had been contesting power 
among themselves since 1979. Ahmadinejad was inaugurated 
in August 2005 and formed a cabinet consisting mostly of men 
with reputations as pragmatic technocrats. 

Government Institutions 

Iran was one of the first countries outside Europe and the 
Americas to adopt a constitution. Adopted in 1906 after a 
peaceful revolution against absolutist rule, Iran's first constitu- 



215 



Iran: A Country Study 



tion established a constitutional monarchy, a popularly elected 
parliament, and a government headed by a prime minister. 
However, this constitution was ignored after 1925 by Iran's 
monarchs, who exercised almost unlimited authority (see The 
Constitutional Revolution, ch. 1). 

The Islamists who led Iran's 1978-79 Revolution sought to 
abolish the monarchy and establish an Islamic republic, based 
on Ayatollah Khomeini's concept of velayat-e faqih. In the sum- 
mer of 1979, a constitutional assembly drafted a new constitu- 
tion that would establish the institutional apparatus for an 
Islamic republic, although one with strong democratic fea- 
tures. The draft constitution called for a mixed presidential- 
parliamentary system, universal adult suffrage, strong guaran- 
tees for civil and political freedoms, elected local councils, and 
a Guardians Council chosen by parliament, whose purpose 
would be to ensure that elections and legislation were compati- 
ble with Islamic law. 

Seeking to strengthen the Islamic aspects of the constitution 
vis-a-vis its popular-sovereignty provisions, Islamist delegates 
made two crucial changes to the draft. First, they created the 
office of faqih (religious jurisprudence expert; see Glossary), 
also referred to in the constitution as the Leader of the Revolu- 
tion. This office was to be vested in Khomeini during his life- 
time. Then it would be occupied by a marja-e taqlid (a "source of 
imitation" in all religious matters) , who would be chosen by an 
elected council of high-ranking Shia clerics, the Assembly of 
Experts. The Leader's responsibility would be to exercise gen- 
eral supervision (velayat) over the government of the Islamic 
Republic to ensure that its policies and actions adhere to 
Islamic principles. Based on his superior knowledge of Islam 
and Islamic law, the Leader's authority would be superior to 
that of any other official. Since the death of Khomeini in 1989, 
the degree of that authority has been the central political 
debate in Iran. Conservatives generally maintain that the 
authority of the office is absolute, while reformists assert that 
the constitution and any amendments approved in popular ref- 
erenda limit the Leader's powers. 

The Islamists also expanded the powers of the Guardians 
Council to veto parliamentary bills and made it an indepen- 
dent body, half of whose members must be clerics appointed by 
the Leader. These two changes gave ultimate authority over the 
state to the Leader and, more broadly, to Shia clerics. Although 
in theory the Leader would be responsible to an elected body, 



216 



President Mahmoud Ahmadinejad 
Courtesy Iran Interests Section, 
Embassy of Pakistan, 
Washington, DC 



the Assembly of Experts, this stipulation did not establish effec- 
tive popular sovereignty because the Guardians Council vets 
candidates for elections to the assembly, and its members must 
be clerics. The revised constitution allowed for an elected pres- 
ident and parliament, political parties, women's suffrage, and 
many other democratic features of the draft constitution. How- 
ever, it also included a number of changes sharply limiting civil 
and political rights. The constitution was approved in a Decem- 
ber 1979 referendum. 

During the 1980s, two important shortcomings of the 1979 
constitution became increasingly clear. First, the document 
called for an elaborate system of checks and balances that, 
given the bitter factionalism that emerged during this period, 
produced institutional paralysis (see Consolidation of the Rev- 
olution, ch. 1). In February 1988, Khomeini tried to eliminate 
the primary source of paralysis by creating the Expediency 
Council, which he empowered to mediate disputes between the 
parliament and the Guardians Council. However, the structure 
and prerogatives of the Expediency Council remained very 
much in dispute, and other potential sources of paralysis still 
existed. Second, as Khomeini's health deteriorated, it became 
increasingly clear that no other marja-e taqlid had sufficient cha- 



217 



Iran: A Country Study 

risma or loyalty to the Islamic regime to succeed him as Leader. 
The constitutional guidelines governing succession therefore 
urgently needed revision. 

To address these issues, Khomeini created a constitutional 
review panel in April 1989 to revise the constitution. The panel 
made several important changes. It eliminated the potential 
for conflict between the prime minister and the president by 
abolishing the office of prime minister, transferring its duties 
to the presidency, and strengthening the presidency in other 
ways. It clarified the structure and prerogatives of the Expedi- 
ency Council. It dropped the requirement that the Leader be a 
marja-e taqlid and eliminated the possibility that a council of 
clerics could permanently assume the powers of the Leader. It 
expanded the Leader's powers in certain ways but removed his 
unilateral ability to dismiss the president and dissolve parlia- 
ment. The panel made other changes as well, notably restruc- 
turing the judiciary and creating a Supreme National Security 
Council (SNSC), headed by the president and empowered to 
oversee foreign, defense, and intelligence policy. These 
changes were approved overwhelmingly in an August 1989 ref- 
erendum. In 2006 the members of the SNSC were heads of the 
three branches of government; the chief of the Joint Staff of 
the Armed Forces; the head of the Planning and Budget Orga- 
nization; two representatives nominated by the Leader; the 
ministers of foreign affairs, interior, and information and secu- 
rity; representatives from the army and the Islamic Revolution- 
ary Guard Corps (IRGC); and any additional minister 
particularly concerned with a given issue. Among other policy 
functions, the SNSC is the lead agency on development of 
nuclear technology. The secretary of the SNSC is ex officio 
Iran's chief spokesman in international negotiations on the 
nuclear issue. 

The Leader, or Faqih 

The Leader of the Revolution is Iran's chief spiritual guide, 
exercising ultimate authority over the state apparatus and all 
political matters (see fig. 11). As enumerated in Article 110 of 
the constitution, the Leader's powers and responsibilities 
include: setting general state policy guidelines and supervising 
their implementation; declaring war and peace; commanding 
the armed forces; appointing and dismissing the six clerical 
members of the Guardians Council, the head of the judiciary, 
the head of state radio and television, and the commanders of 



218 



Government and Politics 



the armed forces; overseeing the activities of the Expediency 
Council; and confirming the suitability of presidential candi- 
dates, certifying the presidential candidate elected in a popular 
vote, and dismissing a president found incompetent by parlia- 
ment or convicted of violating the constitution by the Supreme 
Court. 

In addition, Article 177 empowers the Leader to initiate and 
supervise the process of revising the constitution. The revisions 
are to be drawn up by a council whose members represent each 
branch of government, together with additional appointees of 
the Leader. The revised constitution then is submitted for 
approval by majority vote in a national referendum. 

The Leader is assisted by an office with some 600 employees. 
In addition to a large administrative staff, this office includes 
10 prominent special advisers who assist in areas such as for- 
eign policy, military affairs, economic policy, and cultural mat- 
ters. Closely connected to this office is a network of some 2,000 
representatives of the Leader, who are attached to all govern- 
ment ministries, provincial governorates, branches of the 
armed forces, embassies, parastatal foundations and organiza- 
tions, religious organizations, and major newspapers. The rep- 
resentatives monitor the activities of these bodies on behalf of 
the Leader to ensure that his policy guidelines are followed. 
Most of these representatives are Shia clerics. The Leader's 
office also includes the Central Council of Friday Prayer Lead- 
ers, which oversees the Friday prayer sermons given through- 
out the country each week. These sermons, especially the 
Tehran Friday prayer sermon, are the primary mechanism 
through which Iran's leaders explain their policies and try to 
mobilize and influence the Iranian public. 

Finally, the Leader's office supervises a variety of parastatal 
foundations and organizations. The most important are: the 
Bonyad-e Mostazafin (Foundation of the Disinherited), a huge 
conglomerate that controls an estimated US$12 billion in 
assets and employs some 400,000 workers, and whose proceeds 
are intended to help the poor and the families of men killed in 
the Iran-Iraq War; the Imam Khomeini Relief Committee, a 
large social welfare organization that provides assistance to dis- 
advantaged Iranians; the Supreme Council for Cultural Revolu- 
tion, a body charged with ensuring that cultural materials used 
in the schools and on state television conform to Islamic values; 
and the Islamic Propagation Office, which seeks to promote 
Islam and the principles of the Islamic Republic by publishing 



219 



Iran: A Country Study 



GUARDIANS 
COUNCIL 




Source: Based on information from Shahrough Akhavi in Nikki R. Keddie and Eric 
Hooglund, eds., The Iranian Revolution and the Islamic Republic, Rev. ed., 
Syracuse, 1986. 

Figure 11. Appointive Powers of the Leader 



books and other materials and sponsoring speaking engage- 
ments by clerics. 

The Assembly of Experts 

The Assembly of Experts consists of 86 Shia clerics who have 
a strong record of scholarship and loyalty to the Islamic regime 
and are elected for eight-year terms in popular elections over- 
seen by the Guardians Council. Articles 107 and 109 of the con- 
stitution empower the assembly to select the Leader, applying 
three criteria: The candidate must possess a distinguished 
record of Islamic scholarship, a sense of justice and piety, and 
"right political and social perspicacity, prudence, courage, 
administrative facilities, and adequate capability for leader- 
ship." Article 111 authorizes the Assembly of Experts to dismiss 
the Leader if it determines that he no longer meets these qual- 
ifications or is unable to fulfill his duties. The assembly meets at 
least once annually and in considerable secrecy, mainly to 
review the performance of the Leader. 



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Government and Politics 

The President and Cabinet 

Articles 113-142 of the constitution cover the selection and 
powers of the president and cabinet ministers. The president is 
the country's second-highest official, after the Leader, with 
responsibility for implementing the constitution and heading 
the executive branch of government. Presidents are selected 
for four-year terms in popular elections and can serve no more 
than two consecutive terms. The president must be a practicing 
Shia Muslim of Iranian citizenship and origin who supports the 
Islamic Republic and has appropriate personal qualifications. 
Although the constitution does not explicitly state whether a 
woman may serve as president, the Guardians Council disquali- 
fied women who registered as candidates in the presidential 
elections of 2001 and 2005. 

The president appoints a cabinet consisting of the heads of 
the government's 21 ministries, who must be approved by par- 
liament, as well as an unspecified number of vice presidents, 
who are not subject to parliamentary approval. Cabinet minis- 
ters can be dismissed either by the president or in a no-confi- 
dence vote by a majority in parliament. Article 110 stipulates 
that the Leader can dismiss the president after either a vote by 
two-thirds of the deputies or a rinding by the Supreme Court 
that the president has violated the constitution. If the president 
is dismissed, resigns, or dies in office, the first vice president 
takes over until a new president is selected. 

The Parliament 

Articles 59 and 62-90 of the constitution cover the selection 
process and responsibilities of the parliament (Majlis — see 
Glossary; also known as the Supreme Consultative Assembly) . 
Popular elections for parliament are held every four years. 
Seats are distributed among the country's 290 constituencies, 
each of which elects one deputy. In theory, each constituency 
has a population of just over 200,000. The actual distribution of 
seats favors cities, with Tehran being divided into 30 at-large 
constituencies. Five of the 290 seats are reserved for deputies 
who represent Iran's religious minorities: Christians (three 
seats), Jews (one seat), and Zoroastrians (one seat). 

The parliament is empowered to enact laws within the 
framework specified in the constitution, based on bills for- 
warded by its members, the cabinet, or the judiciary (on judi- 
cial matters only) . The parliament can vote only if two-thirds of 



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Iran: A Country Study 



its members are present. All legislation is subject to approval by 
the Guardians Council. The parliament is authorized to ques- 
tion cabinet ministers and approve or dismiss them. It also can 
authorize popular referenda with a two-thirds vote. The parlia- 
ment cannot be dissolved, and members are immune from 
arrest or prosecution for expressing their views in parliament 
or otherwise carrying out their duties. The presiding officer of 
parliament is the speaker, who is assisted by two deputies and a 
system of 22 permanent committees. Select committees can be 
established when necessary. 

The Guardians Council 

The composition and responsibilities of the Guardians 
Council are enumerated in Articles 90-99 of the constitution. 
The council consists of six Shia clerical experts in Islamic law 
and six Shia laypeople with expertise in various areas of law, 
each serving a six-year term. The Leader appoints the six cleri- 
cal members. The six lay members are chosen by the parlia- 
ment from a list of candidates nominated by the head of the 
judiciary, who in turn is a cleric appointed by the Leader. 

The Guardians Council has three main responsibilities. First, 
it is empowered to determine whether parliamentary legisla- 
tion is compatible with Islamic law and with the constitution. 
Only the six clerical members make the determination with 
respect to Islamic law; all 12 members judge a law's compatibil- 
ity with the constitution. Second, the council is empowered to 
interpret the constitution, with decisions requiring approval by 
at least nine of the 12 members. Third, according to Article 99, 
the council is responsible for supervising elections to choose 
the Assembly of Experts, the president, and the parliament, as 
well as referenda. Based on the guidelines of Article 108, the 
council drew up a law on the first Assembly of Experts elec- 
tions, which were held in 1982. Subsequently, the assembly 
itself was solely responsible for amending this law. Article 110 
gives the council responsibility for confirming the qualifica- 
tions of candidates for the presidency. The Guardians Council 
has no constitutional mandate to supervise local council elec- 
tions (see The Electoral System, this ch.). 

The Expediency Council 

Articles 110-112 of the constitution specify the three main 
duties of the Expediency Council. First, it mediates between 
parliament and the Guardians Council when these two bodies 



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Government and Politics 



cannot reach agreement on legislation. Second, it serves as an 
advisory body to the Leader, who is required to consult with it 
in setting general policy guidelines and resolving problems 
that cannot be remedied by conventional means. Third, it tem- 
porarily assumes the duties of the Leader if he is incapacitated, 
and it plays a similar role during the transition from one 
Leader to another. The president, the speaker of the parlia- 
ment, and several other high-ranking officials are automatically 
members of the Expediency Council. The Leader appoints 
additional members for five-year terms. 

The Judiciary 

From early 1979 until the end of 1982, revolutionary courts 
played a key role in suppressing political activity deemed coun- 
terrevolutionary. Following the failed uprising by the Mojahe- 
din-e Khalq (People's Fighters) and some secular leftist groups 
in June 1981, the revolutionary courts arrested thousands of 
suspected opponents; many were sentenced to prison or even 
death in trials that lacked due process protections for the 
defendants. The overall situation created an atmosphere of 
intimidation that silenced critics of the proceedings. Subse- 
quently, as regular civil, criminal, and special courts developed 
and adopted routine procedures, the role of the revolutionary 
courts diminished. 

Articles 156-174 of the constitution cover the composition 
and powers of the judicial branch of government. The head of 
the judiciary is appointed by the Leader for a five-year term 
and must be a mojtahed — an authority on Islamic jurisprudence 
(see Glossary). The judiciary head has extensive powers, 
including responsibility for overseeing all activities of the judi- 
ciary, appointing the prosecutor general and all judges and 
Supreme Court justices, drafting legislation pertaining to judi- 
cial affairs, and nominating candidates for minister of justice. 
The minister of justice, who is chosen by the president from 
among the nominees, is responsible only for overseeing the 
administration of the ministry and coordinating relations 
between the judiciary and other branches of government. The 
chief justice of the Supreme Court and the prosecutor general 
also serve five-year terms and must have the status of mojtahed. 
The Supreme Court oversees the operations of 33 branch 
courts, to which the chief of the Supreme Court assigns cases. 
Branch courts are not regional in jurisdiction; all but two are 
located in Tehran. 



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Iran: A Country Study 

Public courts, the most active judicial entities, try conven- 
tional civil and criminal cases at province and local levels. Iran 
also has numerous courts authorized to try and discipline per- 
sons perceived as threats to the political status quo. The revolu- 
tionary courts were established in early 1979 to cover general 
political offenses and matters involving national security. Spe- 
cial courts were established under Articles 172 and 173 of the 
constitution for members of the security forces and govern- 
ment officials. Overseen directly by the Leader, the Clerical 
Court was established in 1987 for cases involving members of 
the clergy, including those charged with "ideological offenses." 
Such offenses include interpretations of religious dogma that 
are not acceptable to the establishment clergy and activities, 
such as journalism, outside the realm of religion. The Press 
Court was established in the late 1990s for cases involving the 
mass media. It closed several reformist newspapers in the early 
2000s (see Human Rights, this ch.). 

Although the constitution provides for an independent judi- 
ciary, in practice the judicial branch is influenced strongly by 
political and religious institutions. Defendants have the right to 
public trial, choice of a lawyer, and appeal. Judicial authority is 
concentrated in the judge, who also acts as prosecutor and 
investigator to the exclusion of legal counsel. Judges must be 
experts in Islamic law. The prosecutor's office initiates suits 
against persons charged with attempting to undermine the sys- 
tem of government, a broad category of crimes that includes 
slandering or insulting leading government or clerical figures. 
In the early 2000s, reformers tried unsuccessfully to gain Majlis 
approval for the introduction of jury trials. Juries function only 
in specific cases related to the media. The revolutionary courts 
have authority to hold suspects for long pretrial periods and 
without benefit of counsel. Charges often are vague, such as 
"antistate activity" or "warring against God," and lawyers have 
complained of being harassed and even imprisoned. 

The Problem of Dual Sovereignty 

The structure of government institutions in Iran places 
authority over the state partly in the hands of the Iranian peo- 
ple and partly in the hands of Shia clerics. This configuration 
may be described as "dual sovereignty." All major political insti- 
tutions — the Leader, the Assembly of Experts, the president, the 
cabinet and ministries (including the security forces), the par- 
liament, the Guardians Council, the Expediency Council, and 



224 



Government and Politics 



the judiciary — are held accountable, directly or indirectly, to 
the Iranian people through elections. Similarly, all of these insti- 
tutions are held accountable to members of the Shia clergy 
through the appointment and oversight functions of the 
Leader, the Assembly of Experts, and the Guardians Council. 
Indeed, the constitution is quite ambiguous about sovereignty, 
as reflected in the wording of the key section on this matter, 
Article 56: "Absolute sovereignty over the world and man 
belongs to God, and it is He who has made man master of his 
own social destiny. No one can deprive man of this divine right, 
nor subordinate it to the vested interests of a particular individ- 
ual or group. The people are to exercise this divine right in the 
manner specified in the following articles [of the constitution] ." 

Because of this ambiguity, the extent to which state policy 
reflects the will of the Iranian people or that of clerics has been 
determined by political practice. Since the advent of the Islamic 
regime, the Shia clerics associated with Ayatollah Khomeini's 
vision of an Islamic regime, together with their lay allies, have 
used government institutions to advance their views and inter- 
ests, thereby sharply limiting popular input into state policy 
making. They have done so mainly through their control over 
the office of Leader, the Guardians Council, and the judiciary. 

The constitution gives the Leader far-reaching power. Ayatol- 
lah Khomeini and Khamenei have wielded this power in ways 
that have favored their clerical allies. During his tenure, 
Khomeini almost invariably sided with them in their disputes 
with secular figures. This tendency was particularly noticeable 
in the process of writing the constitution. Subsequently, 
Khamenei strongly supported the conservatives in their dis- 
putes with President Khatami and his reformist allies. Both 
Leaders failed to restrain the security forces and the judiciary, 
which routinely work outside the law to suppress popular pro- 
test movements. Although the Assembly of Experts theoreti- 
cally has oversight power over the Leader, it has yet to use this 
power to hold Khamenei accountable to the Iranian public. In 
fact, the requirement that members of the assembly be Shia 
clerics, together with the Guardians Council's efforts to screen 
candidates in elections to this body, has ensured that the assem- 
bly's actions reflect the views of the clergy. 

The Guardians Council has acted to block initiatives that it 
has perceived as threatening to clerical prerogatives, contrary 
to Islam, or harmful to private property rights. It has made 
extensive use of its power to review legislation, blocking parlia- 



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Iran: A Country Study 



mentary initiatives in the 1980s to redistribute income and 
land and, more recently, bills to expand and protect civil rights. 
Although the Expediency Council is empowered to override 
the Guardians Council's vetoes, its heterogeneous membership 
of elected and appointed officials has greatly hindered its abil- 
ity to reach consensus. This was especially true during the 
Khatami administrations, when conservative and reformist 
membership was nearly equal. The Expediency Council rarely 
overruled Guardians Council vetoes of key political reform leg- 
islation while Khatami was president. 

Since its inception, the Guardians Council also has had 
responsibility for vetting candidates for political office. It has 
used this authority to disqualify all candidates it deemed insuf- 
ficiently committed to the Islamic regime. Since the early 
1990s, the members of the Guardians Council have been cler- 
ics and lawyers committed to the conservative interpretation of 
the institution of velayat-e faqih as vesting paramount or even 
absolute authority in the Leader. They have disqualified candi- 
dates who did not share this view, most notably prior to the 
1992 parliamentary elections, the 1998 Assembly of Experts 
elections, the 2004 parliamentary elections, and the 2005 presi- 
dential election. Occasionally, the Guardians Council's actions 
have provoked such controversy that the Leader has felt com- 
pelled to intervene, as Khomeini did several times in the 1980s. 
The most tangible example was in 1988, when Khomeini cre- 
ated the Expediency Council as a mediating agency between 
the parliament and the Guardians Council. Since becoming 
Leader in 1989, Khamenei also has intervened to restrain the 
Guardians Council. For example, he ordered the council to 
accept the results of the 2000 parliamentary elections when the 
council seemed determined to nullify the victories of many 
reformists. In 2004 Khamenei demanded that the council 
review its disqualification of candidates for the parliamentary 
elections. 

Local Government 

Iran is divided into 30 provinces ( ostans) , which in 2007 were 
subdivided into a total of 321 counties {shahrestans) . Each 
county encompasses one or more incorporated cities (shahrs) 
and several rural districts (bakhshs). There were 705 incorpo- 
rated cities in 2003; the total number fluctuates, however, as 
large villages obtain municipal status and new towns are 
annexed by nearby large cities. A total of 842 rural districts 



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Government and Politics 



encompassed 68,000 villages and 2,000 farms, the latter 
denned as localities in which only a single family resides. As was 
also the case before the Revolution, Iran's provinces are admin- 
istered by a governor general appointed by the central govern- 
ment. The governor general, in consultation with the Ministry 
of Interior, appoints the governor of each county in the prov- 
ince, and, in consultation with the latter, the chief of each rural 
district. Prior to 1999, mayors and other urban officials also 
were appointed, but in most villages the village head (kad- 
khoda — see Glossary) was chosen by either election or consen- 
sus. In addition to the formal structure of local government, 
which was under the indirect supervision of the Ministry of 
Interior, in many areas the Leader's representatives, the Friday 
prayer leaders, and the commanders of the security forces also 
exercised considerable influence independently of the govern- 
ment officials. 

In the 1990s, the emergence of a strong movement for polit- 
ical decentralization increased pressure for the implementa- 
tion of Article 100 of the constitution, which provides for 
popularly elected local councils. Accordingly, the parliament 
passed a law in 1998 detailing selection procedures and the 
duties of local councils. This law provided for local councils to 
be elected for four-year terms in all cities and large villages, 
with small villages in proximity to each other sharing councils. 
Provincial, county, and district councils then would be made up 
of representatives from the city and village councils in their 
areas of jurisdiction. The city and village councils would 
appoint their own mayors and village heads. The powers of the 
councils would supersede those of the central government in 
the affairs of each administrative unit. Local council elections 
were held throughout Iran in 1999, 2003, and 2007. 

The Electoral System 

The constitution does not further clarify the role of the 
Guardians Council in presidential and parliamentary elections, 
stating only that the procedures for these elections will be spec- 
ified in laws. The parliament has drawn up election laws that 
give the council considerable authority over national elections. 
As a result, the council exerts far more influence over presiden- 
tial and parliamentary elections than is implied by the "supervi- 
sory" role stipulated in the constitution. For example, the 
parliamentary election law of 1984 divides responsibility for 
administering parliamentary elections between the Guardians 



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Iran: A Country Study 



Council and the Ministry of Interior in ways that give the coun- 
cil a preeminent role. The law states that the council's supervi- 
sory role is "general and extends to all stages and regards all 
affairs related to [parliamentary] elections." Under the 1984 
law, the council established the Central Oversight Committee, 
which reviews the credentials of all candidates according to 
vaguely worded criteria and verifies the authenticity of ballots. 
The Ministry of Interior and provincial officials are empowered 
to appoint executive committees in each election district to 
review candidates' credentials, staff and maintain voting facili- 
ties, and report election-related crimes to the Central Over- 
sight Committee. Although the council and the ministry 
therefore can review and reject candidates, the Guardians 
Council has used this power much more assertively than the 
Ministry of Interior. Indeed, exercise of its vetting power is the 
main way in which the council has exerted control over parlia- 
mentary elections. Other provisions of the election law limit 
candidates to one week of campaigning, stipulate that voting is 
by secret ballot, provide for a second round of voting for each 
seat where no candidate receives 25 percent of the first-round 
vote, and set the minimum age for voters at 16. 

The presidential election law, enacted in 1985, is broadly 
similar to the parliamentary law, except that the constitution 
gives the Guardians Council explicit authority to vet presiden- 
tial candidates. As in parliamentary elections, the Guardians 
Council has general supervisory authority, and its Central Over- 
sight Committee reviews candidates' credentials and verifies 
the validity of ballots. The Ministry of Interior's executive com- 
mittees operate voting facilities and report election-related 
crimes to the Central Oversight Committee. Like the law on 
parliamentary elections, the presidential election law limits 
campaigning to one week, calls for a secret ballot and a second 
round of voting if no candidate wins a majority, and sets the 
minimum voting age at 16. 

When parliament was developing procedures in 1998 for the 
first local council elections, the Guardians Council did not 
have the administrative capacity to supervise races for some 
200,000 positions throughout the country, so it did not 
demand a supervisory role. Instead, the parliament created the 
Local Elections Supervision Board to oversee these elections. 
This body, which was headed by a conservative cleric, made 
some effort to block reformist candidates in 1999 and 2003, 
although to little effect. As in presidential and parliamentary 



228 



Government and Politics 



elections, the Ministry of Interior operates the voting facilities 
and reports crimes in connection with local council elections. 

The only referendum since establishment of the Guardians 
Council was held to approve the constitutional revisions of 
1989. The procedures for that vote were decreed by Ayatollah 
Khomeini and not by statute. No laws governing referenda 
exist. 

Political Parties and Civil Society 

Article 26 of the constitution authorizes the existence of 
political parties and other civil society organizations, so long as 
they do not violate "the principles of independence, freedom, 
national unity, the criteria of Islam, or the basis of the Islamic 
republic." These general guidelines can be interpreted very 
broadly. Legislation permitting the establishment of parties was 
not adopted until 1998, following President Khatami's election. 
Nevertheless, a variety of partylike organizations and other civil 
society institutions have existed since the beginning of the 
Islamic regime, and many more have emerged since 1998. 

Although in the early 2000s Iran had many parties and civil 
society organizations, none developed a broad base of popular 
support. Rather than parties, Iranians generally have preferred 
to identify with political factions, whose positions have evolved 
over time as the views of their supporters have changed. A 
changing constellation of parties and other civil society organi- 
zations embody these factions, representing narrow constituen- 
cies in formal or informal coalitions with like-minded 
organizations. Besides three main political factions, several 
minor factions exist that are largely or entirely outside politics. 
Various factions also exist among the many Iranians living 
abroad. 

The Reformist Coalition 

The 18 reformist parties of the Khatami era evolved from the 
Islamic leftist faction of the early 1980s to the mid-1990s. After 
Khatami was elected in 1997, these reformist parties estab- 
lished the Second of Khordad coalition, which became the 
reformists' main political vehicle. The coalition had two main 
parties. The Islamic Iran Participation Party (IIPP; Hezb-e 
Mosharakat-e Iran-e Island) was established in 1998 by a group 
of reformist intellectuals and activists to promote Khatami's 
reforms, with Mohammad Reza Khatami, the president's 



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Iran: A Country Study 

brother, as its leader. The IIPP has tried to appeal to a broad 
range of Iranians. The Mojahedin of the Islamic Revolution 
Organization (MIRO; Sazman-e Mojahedin-e Enqelab-e Islami) 
was established in April 1979, when several small Islamic leftist 
groups united to create an organization to defend the newly 
established Islamic regime. The organization disbanded several 
years later but was reestablished in the early 1990s with a new 
agenda that stressed democratic practices over popular sover- 
eignty guided by an elite vanguard. The MIRO has had a nar- 
row following, consisting mainly of progressive-minded 
Islamists. The reformist faction also encompassed a number of 
smaller parties, including the Islamic Iran Solidarity Party 
(Hezb-e Hambastegi-ye Iran-e Islami) and the Islamic Labor 
Party (Hezb-e Islami-ye Kar) . 

Although it was not a party, the Militant Clerics Association 
(Majma-e Ruhaniyun-e Mobarez; short form Ruhaniyun) 
worked closely with the Second of Khordad coalition. The 
Ruhaniyun was a Shia clerical organization that broke off from 
the Combatant Clerics Association in the 1980s to pursue a 
reformist political agenda that stressed civil liberties and 
accountability of government personnel and institutions. Dur- 
ing the 1990s, members of the Ruhaniyun began advocating 
democracy. In 1997 they supported the candidacy of Khatami, a 
member who was elected as the group's secretary general after 
he completed his eight-year tenure as president in August 2005. 

The Office for Consolidating Unity (OCU; Daftar-e Takhim- 
e Vahdat), Iran's largest student organization, was created by 
Islamist students in 1979. It strongly supported Khatami from 
1997 until after the parliamentary elections of 2000, when the 
OCU split into two wings. The larger wing, Allameh, broke with 
Khatami and advocated a more confrontational approach 
toward the conservatives. The smaller wing, Shirazi, favored 
Khatami's course of compromise with the conservatives. 

Several civil society organizations also backed the reformist 
coalition. These included cooperatives, labor unions, profes- 
sional associations, and women's organizations. Among the bet- 
ter-known groups were the Association of Iranian Writers and 
the Society for the Defense of Human Rights. 

The Centrist Faction 

In the early 1990s, a group of pragmatic proteges of Presi- 
dent Rafsanjani emerged as a third faction, occupying a posi- 
tion between the Islamic reformers and the Islamic 



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Government and Politics 



conservatives. They established the Executives of Construction 
(Kargozaran-e Sazendegi) before the 1996 parliamentary elec- 
tions but won few seats. The Executives of Construction sup- 
ported Khatami in 1997, and some of its members joined his 
cabinet. Several members became prominent reformist lead- 
ers, but the organization remained ambivalent about the 
reformist movement and gradually split into reformist and cen- 
trist wings. The Executives of Construction did not try to orga- 
nize as a mass party and never cultivated popular support. 
Nevertheless, some individual members have enjoyed a 
national following. The party actively supported Rafsanjani in 
the 2005 presidential election, organizing rallies and other 
public events for him in Tehran and the provinces. 

The Conservative Coalition 

The conservative bloc is a heterogeneous grouping united 
on two issues: a strict interpretation of the constitution, espe- 
cially the clauses empowering the Leader, and protection of 
private economic activities. Many older conservatives belonged 
to prerevolutionary Islamic organizations such as the Islamic 
Warriors (Fedayan-e Islami) and the Islamic Nations Party 
(Hezb-e Mellal-e Islami); younger ones were active in Islamic 
student groups in the late 1970s. The conservatives' main focus 
is on protecting the Islamic cultural restrictions implemented 
under the Islamic regime and the prerogatives and lifestyle of 
Iran's traditional classes, which they believe are threatened by 
the reformist movement and its efforts to promote political 
and economic reforms. The conservatives have a small but 
devoted base of support among the bazaar (see Glossary) mer- 
chants, urban religious families, and small farmers. Four politi- 
cal organizations have drawn significant conservative support. 

The Combatant Clerics Association (Jameh-ye Ruhaniyat-e 
Mobarez; short form Jameh) was established in 1979 by 
Khomeini's clerical followers. A group of reform clerics broke 
off in the 1980s to form the Militant Clerics Association, leaving 
the Jameh dominated by conservatives. Its members are clergy 
who prefer strict, rather than liberal, interpretations of Islamic 
legal codes. The Islamic Coalition Organization (Jamiat-e Mot- 
alafeh-ye Islami; short form Motalafeh) was originally a coali- 
tion of traditionalist guilds and other organizations based in 
Iran's bazaar community before the Revolution. It advocates 
cultural restrictions and bazaar-oriented economic policies, 
and it is closely tied to the conservative Shia clergy. The Sup- 



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Iran: A Country Study 

porters of the Party of God (Ansar-e Hezbollah; short form 
Ansar) is an extremely conservative vigilante group notorious 
for assaulting and intimidating reformist leaders. Most of its 
members are war veterans who believe passionately that the 
authority of the Leader is absolute and must be obeyed without 
question, a position that puts them into direct conflict with the 
reformists. Ansar also opposes foreign cultural influences. The 
Islamic Iran Builders Council (Etelaf-e Abadgaran-e Iran-e Isl- 
and; short form Abadgaran) was created to contest the 2003 
local council elections. Most of its members are technocrats 
who espouse economic development and pragmatic leader- 
ship. Abadgaran led the conservatives to victory in the 2004 
parliamentary elections and the 2005 presidential election. 
The organization tends to take a flexible, moderate position on 
cultural issues. 

The conservative faction also includes many smaller parties 
and civil society organizations, such as the Followers of the 
Line of the Imam and the Leader (Peyrovan-e Khatt-e Imam va 
Rahbari) and the Moderation and Development Party (Hezb-e 
Etedal va Towse'eh). Various guilds and professional and reli- 
gious organizations, mainly associated with the bazaar commu- 
nity, also belong to the conservative faction. 

Other Political Groups 

Several relatively minor political groups exist in Iran but are 
largely or entirely excluded from politics. The "religious 
nationalists" ( melli mazhabi) are Islamic modernists who sup- 
port the Islamic regime but advocate transforming it into an 
Islamic democracy. Iran's leaders generally have tolerated this 
faction, although some of its members have been arrested. The 
most important religious nationalist organization has been the 
Iran Freedom Movement (Nezhat-e Azadi-ye Iran), which led 
the provisional government in 1979 but was marginalized as 
the Revolution became more radical. Most of its leaders were 
arrested in 2002, and the organization was banned. Several 
members were allowed to run as individuals in the 2003 local 
council elections but did poorly. 

Politicians who favored either a secular democracy or rees- 
tablishment of the monarchy were repressed or went into exile 
in late 1978 and early 1979. Several political organizations advo- 
cating these views exist outside Iran, ranging from secular dem- 
ocratic organizations descended from the venerable National 
Front (Jebhe-ye Melli) to monarchist organizations supporting 



232 



Government and Politics 



Reza Pahlavi, son of the last shah. These organizations appeal 
mainly to Iranians in expatriate communities in North America 
and Europe. They generally have few contacts inside Iran and 
no organized support there. Various Marxist, Islamic socialist, 
and ethnic organizations also exist outside Iran. Most of these 
organizations are remnants of guerrilla groups that participated 
in the Revolution or formed shortly afterward but soon turned 
against the Islamic regime and were repressed severely in the 
early 1980s. The most important is the Mojahedin-e Khalq (Peo- 
ple's Fighters), whose leader, Masoud Rajavi, fled to France in 
1981 and subsequently relocated to Iraq, where he established a 
base and began cooperating with the government of Saddam 
Hussein during the final years of the Iran-Iraq War. This rela- 
tionship with the Iraqi government made the Mojahedin deeply 
unpopular inside Iran, where the organization was believed to 
have few underground followers. The Mojahedin remained in 
Iraq after the U.S. -led invasion of 2003. The U.S. forces first 
took custody of the organization's base and seized all weapons, 
then allowed the dwindling force to remain, against the wishes 
of the Iraqi provisional government. 

Civil Society Organizations 

Iran has developed a strong tradition of civil society activism 
since 1979. Numerous nongovernmental organizations 
(NGOs) work with international groups on such issues as con- 
sumer protection, cultural heritage, economic development, 
education, the environment, media, publishing, science, trade, 
and women's rights. NGOs that work on legal and political 
issues are watched closely by judicial authorities and have expe- 
rienced official harassment, but other NGOs generally operate 
freely. Chic organizations in cities and towns include commu- 
nity development groups, parent-teacher associations in 
schools, social services groups, and sports associations. More 
informal, voluntary organizations include thousands of cul- 
tural, religious, and social groups that meet weekly, monthly, or 
seasonally. 

Human Rights 

Article 4 of Iran's constitution stipulates that all law^s must be 
based on fundamental Islamic principles. The six clerical mem- 
bers of the Guardians Council are empowered to ensure that 
this provision is observed. Articles 12 and 13 state that the offi- 



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Iran: A Country Study 



cial religion of Iran is Twelver Shiism, but members of the 
other major branches of Islam and the Christian, Jewish, and 
Zoroastrian religions are free to practice their own faiths (see 
Shia Islam in Iran, ch. 2). In matters of personal status (e.g., 
marriage, divorce, and probate), such individuals are to be 
judged by principles based on their own faiths. Article 24 guar- 
antees freedom of the press, except "when it is detrimental to 
the fundamental principles of Islam or the rights of the pub- 
lic." Article 27 guarantees freedom of assembly, except in cir- 
cumstances that are "detrimental to the fundamental 
principles of Islam." Article 38 bans all forms of torture. Article 
165 states that all trials should be open to the public, except in 
cases in which this would undermine public morality or disci- 
pline or both parties request a closed trial. 

Despite these constitutional guarantees, in many instances 
civil liberties were not protected during the early years of the 
Islamic Republic. More than 500 high officials, military offic- 
ers, and secret police agents from the shah's regime were exe- 
cuted after summary trials in 1979. In the summer of 1980, the 
discovery of alleged plots within the military to overthrow the 
government led to wide-scale arrests and the execution of more 
than 100 officers condemned by hastily convened tribunals at 
which no defense was allowed. According to Amnesty Interna- 
tional, in the year following the abortive uprising of the Moja- 
hedin in June 1981, nearly 3,000 persons were executed 
following their summary trials as Mojahedin members. During 
the 1980s, almost all opposition organizations were suppressed; 
civil and political freedoms were sharply curtailed, the inde- 
pendent press was shut down, intellectual and artistic expres- 
sion was heavily restricted, and members of the Baha'i faith 
were persecuted. Harsh punishments such as flogging, justified 
as "Islamic," were applied for violations of social mores and rel- 
atively minor crimes such as nonobservance of public dress 
codes, consumption of alcoholic beverages, petty theft, and 
premarital sex. Robbers could have their fingers amputated, 
and adulterers could be executed by stoning. 

Beginning in the late 1980s, the judiciary began to monitor 
prisons and courts with the aim of ensuring respect for the con- 
stitutional rights of the accused in practice. Consequently, the 
human rights climate improved, and by the mid-1990s political 
executions had ceased. Nevertheless, Iran remained among the 
leading countries in executions, averaging 100 per year in the 
1990s. Crimes for which offenders received capital punishment 



234 



Government and Politics 



included murder, rape, treason, and adultery. Human rights 
lawyers such as Shirin Ebadi maintained that torture — usually 
in the form of prolonged solitary detention — and other arbi- 
trary legal practices continued to occur, even though they were 
contrary to law. 

The improvement in human rights conditions initially con- 
tinued under President Khatami. However, during the Khatami 
administration the judiciary charged many reformist political 
leaders and newspaper publishers with slander, and their trials 
provoked considerable controversy about arbitrary trial proce- 
dures, mistreatment in prison, and restrictions on the right of 
expression. As the reformists became increasingly bold, the 
conservatives responded by enacting new laws on slander 
under which reformist leaders subsequently were arrested and 
reformist newspapers closed down. 

The reformists' victory in the February 2000 parliamentary 
elections, which posed a serious threat to the conservatives' 
political control, led to an intensification of arrests and media 
closures. Two cases of extrajudicial killing in 2003 focused 
international attention on Iran's legal practices. One case 
involved the execution of two Iranian Kurds accused of mem- 
bership in Kurdish armed opposition groups. The other 
involved an Iranian photojournalist, Zahra Kazemi, who died 
after being severely beaten in prison. Because Kazemi was a 
Canadian citizen, her death galvanized the international 
human rights community. Nevertheless, in the early 2000s 
political executions and other politically motivated killings did 
not play a major role in preserving the Islamic regime or influ- 
encing relations among the various political factions. 

In the early 2000s, irregularities in Iran's legal system were 
widespread and had an extensive impact on the country's poli- 
tics. Reformist and dissident political activists frequently were 
arrested and prosecuted on vague charges of insulting promi- 
nent individuals or threatening national security. Amnesty Inter- 
national reported "scores" of arrests of this sort annually. 
Defendants often were held for long periods without trial. Doz- 
ens of instances of torture were documented each year. Trials in 
political cases usually failed to meet minimum due process stan- 
dards. Defendants often were denied access to lawyers and fam- 
ily members; lawyers were prevented from seeing crucial 
evidence and sometimes prosecuted for their work; outside 
observers were barred from the courtroom; sentences some- 
times were inappropriately harsh; and juries were not used in 



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Iran: A Country Study 



legal proceedings. Although reformists and dissidents almost 
always were convicted, the few vigilantes or security personnel 
who came to trial usually were acquitted or given light sentences. 

From 2000 to 2004, reformists tried to use their control of 
the parliament to eliminate some irregularities, introducing 
legislation to specify what kinds of political activity were illegal 
and to outlaw torture. They also proposed that Iran join the 
United Nations Convention on Torture. However, the Guard- 
ians Council vetoed each of these bills. The Iranian govern- 
ment also often prevented international human rights 
organizations from entering the country to examine human 
rights conditions. 

Irregular methods used to silence political activists and bar 
them from engaging in politics encouraged self-censorship by 
other activists. By 2005, many prominent reformist leaders and 
dissidents had been arrested, imprisoned, harassed, or pre- 
vented from holding public office; all politically active Iranians 
understood that they might face such harsh treatment if the posi- 
tions they advocated irritated politically powerful conservatives. 

Restrictions on freedom of association also have had a pow- 
erful impact on politics in Iran. Although many political par- 
ties and other civil society organizations exist, any group that in 
the opinion of conservative officials does not support the 
Islamic regime is banned from political activity (see Political 
Parties and Civil Society, this ch.). Independent trade unions 
also have been banned. In addition, the judiciary, the security 
forces, and conservative vigilante groups have sharply limited 
the ability of Iranians to hold demonstrations and strikes, and 
permits for such activity are denied regularly. Security and vigi- 
lante groups often attack and arrest protesters and strikers. 
Hundreds of student protesters have been arrested; some have 
been severely beaten, imprisoned for long periods, and tor- 
tured. These restrictions on freedom of association apply 
almost exclusively to reformist politicians and opponents of the 
Islamic regime. Because reformists and regime opponents have 
little institutional power and rely mainly on mobilizing popular 
support to exercise influence, these restrictions strongly bene- 
fit the conservatives. 

Many aspects of Iran's criminal justice system violate interna- 
tionally accepted human rights standards and are opposed by 
Iranian human rights activists. In the early 2000s, some punish- 
ments, widely regarded as inhumane or inappropriate, were 
suspended but not legally rescinded. In addition, numerous 



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Government and Politics 



legal practices are widely regarded as discriminatory toward 
women. These include stipulations that a woman's testimony is 
worth only half that of a man; that the monetary compensation 
for a woman who is killed, accidentally or otherwise, is one-half 
the compensation for a man who is killed; and that a woman 
must receive permission from an adult male relative to marry 
or to obtain a passport. Women also have fewer rights than 
men in divorce and child custody cases. 

Publicity about human rights intensified after lawyer Shirin 
Ebadi was awarded a Nobel Peace Prize in 2003 for her work 
inside Iran on behalf of women's, children's, and prisoners' 
rights. Mahmud Hashem Shahrudi, head of the judiciary, 
appointed a special judicial investigator to examine conditions 
in the courts and prisons. The report, made public in 2005, 
confirmed that "un-Islamic" practices such as torture and viola- 
tions of defendants' rights were a continuing problem that 
needed to be addressed through an educational program 
directed to Iranians involved in law enforcement, criminal 
investigations, and prosecutions. 

Mass Media and the Arts 

After a brief flourishing of the press following the Revolu- 
tion, beginning in 1981 Iran's leaders gradually closed down or 
took over all newspapers and magazines that expressed opposi- 
tion to the Islamic regime. Consequently, during the early and 
mid-1980s, the Iranian news media reflected only a narrow 
range of views. Iran's new leaders also inherited the monar- 
chy's state-controlled radio and television media and contin- 
ued to exercise tight control over its content. 

Restrictions on the press began to ease somewhat in the late 
1980s, when Mohammad Khatami was minister of Islamic cul- 
ture and guidance and permitted a limited degree of relax- 
ation to occur. This trend accelerated considerably in the early 
1990s, especially with the publication of the newspapers Salaam 
(Peace) and Asr-e Ma (Our Era) and the magazine Kiyan 
(Foundation), which played crucial roles in the emergence of 
the reformist faction. The press flourished again after Khatami 
was elected president in 1997, and many pro-reformist newspa- 
pers appeared. However, in 1999 the conservative-controlled 
judiciary began to close down these newspapers and arrest 
some journalists and editors. Thanks to new laws on slander 
and the overt support of Khamenei, these closures and arrests 
increased sharply in April 2000 (see Political Dynamics, this 



237 



Iran: A Country Study 

ch.). By early 2005, more than a hundred newspapers had been 
closed and scores of journalists and editors arrested. In its 
annual report for 2004, the press watchdog organization 
Reporters Without Borders summarized the mixed status of 
Iran's news media, describing Iran as "the biggest prison for 
journalists in the Middle East, with harsh censorship but also a 
prolific and vigorous written press that is clearly helping the 
growth of civil society." 

Of the major newspapers published in Iran, Kayhan (World), 
Ettela'at (Information), Resalat (Prophetic Mission), and Jom- 
huri-ye Islami (Islamic Republic) reflect the views of the conser- 
vative faction, while Hambastegi (Together) Mardom Salari (Free 
People), and Shargh (The East) have a reformist tone. The judi- 
ciary closed Salaam, Asr-e Ma, Kiyan, and many other major 
reformist newspapers and magazines. However, it generally 
allows some reformist publications to remain open at any given 
time, typically closing one after a few months but allowing new 
ones to open. In addition, four English-language newspapers 
are published in Iran: the conservative Kayhan International and 
Tehran Times and the reformist Iran News and Iran Daily. News- 
papers opposing the Islamic regime or even reflecting the 
"loyal opposition" perspective of the religious-nationalist fac- 
tion have not been granted publishing licenses. 

All radio and television media inside Iran are under the con- 
trol of a state agency, Islamic Republic of Iran Broadcasting. 
The head of this agency is appointed by the Leader, and the 
content of political programming reflects generally conserva- 
tive views. In 2005 Iran had six national television channels and 
seven national radio stations, which offered programming on a 
wide range of topics. Iran also broadcast radio and television 
programs in Arabic, Kurdish, Turkish, English, Hebrew, and 
other languages to nearby countries and, by satellite and the 
Internet, to a global audience. 

Iranians who own shortwave radios seek access to foreign 
broadcast media. Persian-language radio broadcasts are 
beamed into Iran by many governments, including those of the 
United States, Britain, France, Germany, Russia, Israel, China, 
and Japan. These broadcasts, especially those of the British 
Broadcasting Company and Voice of America, are popular 
among some Iranians. Exile opposition organizations also 
make radio broadcasts into Iran, usually with the help of for- 
eign governments. However, in the early 2000s these broadcasts 
decreased considerably as the organizations grew weaker and 



238 



Government and Politics 



the United States reduced or ended funding. In 2003 the over- 
throw of the government of Saddam Hussein in Iraq, which 
had hosted some opposition broadcasts, further reduced the 
range of available broadcasting. Several evangelical Christian 
stations and a Baha'i station also broadcast into Iran. The Ira- 
nian government jams some but not all of these foreign trans- 
missions. 

Foreign satellite television broadcasts also are watched by 
Iranians who have the means to purchase satellite dishes. The 
estimated 1.5 million satellite television receivers in Iran can 
pick up a wide range of foreign programming, including many 
commercial and government-owned news channels and a 
broad variety of entertainment programs in various languages. 
In the early 2000s, many Persian-language stations were estab- 
lished outside Iran to broadcast into Iran and to the Iranian 
diaspora. Mainly located in Los Angeles, many of these stations 
have a strong monarchist orientation. The U.S. government's 
Voice of America also broadcasts Persian-language television 
programs into Iran. The Iranian government tried to curb 
access by outlawing satellite dishes and antennas in 1995, but 
enforcement stopped in 1997. Thus, in 2005 satellite receivers 
remain ubiquitous in wealthy urban neighborhoods. At that 
time, surveys indicated that as many as 12 percent of Iranian 
adults had access to satellite television. 

The Internet has become another important means of access 
to foreign media for many Iranians. A 2005 study estimated 
that as many as 7.5 million Iranians had access to the Internet 
at that time. Most heavy Internet users are below age 35. Most 
of these users patronize Internet cafes, which became common 
in Tehran and other large cities in the early 2000s. Iranians use 
the Internet to gain access to the many Persian-language news 
and cultural sites and chat rooms that emerged in the early 
2000s and to exchange e-mail and make inexpensive telephone 
calls to friends and relatives abroad. Many Iranian political 
organizations and activists have established Web sites or blogs, 
which often contain highly informative and sharply critical 
material. The Iranian government has arrested some Internet 
commentators and blocked some of their Web sites. It also has 
attempted to block some foreign-based Persian-language Web 
sites and pornographic sites, with limited success. 

Iran's writers, filmmakers, and other artists also face limits 
on freedom of expression. Publishers are not required to sub- 
mit book manuscripts to the Ministry of Islamic Culture and 



239 



Iran: A Country Study 



Guidance for prepublication approval, but they risk prosecu- 
tion and heavy fines if the ministry revokes distribution of a 
book after its publication. A considerable amount of critical 
material was published in Iran in the early 2000s, including 
some incisive works by investigative journalists. About 35,000 
new titles were published annually in that period. In contrast to 
book publishers, filmmakers, most of whom depend heavily on 
government subsidies for their work, are obliged to submit 
scripts and film proposals to the Ministry of Islamic Culture 
and Guidance for review. Nevertheless, Iran has an internation- 
ally acclaimed film industry. Iranian filmmakers produce subtle 
films that are often implicitly critical of the regime. Some of 
these films have been banned in Iran but granted licenses for 
distribution abroad. Iran also has a vibrant community of paint- 
ers and other visual artists, with many galleries and an excellent 
contemporary art museum in Tehran. Some of their work also 
has a critical tone, although most of Iran's visual artists avoid 
politically sensitive topics. 

Foreign Policy 

After the election of President Khatami in May 1997, Iran's 
foreign policy continued to follow the general approach that 
had emerged during the last year of Rafsanjani's presidency 
(see The Rafsanjani Presidency, ch. L). Khatami and his for- 
eign minister, Kamal Kharrazi, continued to seek better rela- 
tions with Europe and with most pro-Western countries in the 
region. They tried to improve Iran's relations with the United 
States, which had been characterized by mutual suspicion and 
an absence of diplomatic ties since 1980. Beginning in the 
Khatami era, Iran's efforts to normalize relations with the 
United States have been impeded by ongoing U.S. suspicions 
that Iran supports groups such as Hizballah in Lebanon, is 
opposed to the Middle East peace process, and is pursuing a 
secret nuclear weapons program. In Iran, too, the worldview of 
many key officials has been shaped by nationalism and even 
xenophobia, and such leaders continue to distrust the United 
States. 

Relations with Europe 

Although Iran's relations with the countries of the European 
Union (EU) had been harmed in 1989 by Khomeini's fatwa 
(religious opinion) against British author Salman Rushdie 



240 



Modern Art Museum, Tehran 
Courtesy Nader Davoodi 



(based on Rushdie's characterization of the Prophet and his 
family in the novel Satanic Verses) and by assassinations of prom- 
inent Iranian political dissidents living in Europe, President 
Rafsanjani tried to improve ties during the 1990s. These efforts 
suffered a serious setback in April 1997, when a German court 
implicated top Iranian officials in the 1992 assassination of four 
Iranian Kurdish dissidents in Berlin. Germany and many other 
countries of the EU responded to the judicial finding by with- 
drawing their ambassadors from Tehran and suspending the 
EU's "critical dialogue" with Iran. 

After his inauguration, President Khatami moved quickly to 
repair relations with the EU countries. In November 1997, Iran 
and the EU reached an agreement under which all EU ambas- 
sadors would return to Iran. The EU also soon authorized a 
resumption of ministry-level contacts with Iran, although the 
critical dialog remained suspended. Iran conducted intense 
negotiations with Britain in this period over the Rushdie affair, 
and in September 1998 British officials announced an agree- 
ment under which the Iranian government would not enforce 
the death threat against Rushdie. Although the fatwa was not 
revoked, British officials expressed satisfaction with the agree- 
ment. Further, the assassinations of Iranian exiles that had 



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Iran: A Country Study 

begun in Europe in the early 1990s now had ceased. Despite 
potentially harmful U.S. economic sanctions, European busi- 
nesses continued to increase their involvement in Iran after 
Khatami was elected, and many European NGOs became more 
involved in Iran as well. 

Iran's relations with the EU countries did not improve dur- 
ing Khatami's second term. The arrest and trial of Iranian 
reformists who had participated in an April 2000 German 
Green Party-sponsored conference in Berlin on democracy in 
Iran raised concerns in Europe pertaining to human rights in 
the Islamic Republic. Furthermore, the August 2002 revela- 
tions that Iran had secretly built plants to enrich uranium and 
extract plutonium led the EU to reassess relations with Iran. A 
subsequent International Atomic Energy Agency (IAEA) 
inspection found that Iran's nuclear program was very 
advanced. Even though the IAEA said that Iran had the right, 
as a signatory to the Nuclear Non-Proliferation Treaty (NPT) , 
to enrich uranium to use as fuel in a civilian nuclear power pro- 
gram, it criticized Tehran for failing to report its enrichment 
activities and requested that Iran provide the IAEA with infor- 
mation on how it had obtained the centrifuges used in enrich- 
ment experiments. Following this report, Britain, France, and 
Germany, acting on behalf of the EU as the "EU3," began nego- 
tiations with Iran aimed at persuading it to suspend its ura- 
nium enrichment activities voluntarily. 

In 2003 the EU3 and Iran reached an agreement whereby 
Iran consented to suspend uranium enrichment activities vol- 
untarily in return for verbal assurances that it would be offered 
a long-term trade agreement. In June 2004, citing a lack of 
progress in talks on a permanent agreement, Iran announced 
its intention of resuming uranium enrichment. This decision 
set in motion a new round of Iran-EU3 negotiations that 
yielded a new voluntary suspension agreement in November 
2004. In return, the EU3 promised that talks on a permanent 
agreement would be held in tandem with talks on an overall 
trade agreement and support for Iran's application for mem- 
bership in the World Trade Organization. When talks made no 
progress on nonnuclear issues, in 2005 Iran again announced 
resumption of certain uranium fuel processing activities. Iran 
rejected a comprehensive proposal for trade in August, on the 
grounds that the proposal did not deal with the issue of U.S. 
economic sanctions, which were harming Iran's economy. A 
stalemate then developed, with the EU3 contending that Iran's 



242 



Government and Politics 



rejection of the proposal had ended the negotiations while 
Iran asserted that it was willing to continue talking. In mid- 
2006, the United Nations (UN) Security Council reacted to the 
IAEA's appeal of the stalemate by demanding that Iran sus- 
pend uranium enrichment. When Iran failed to meet the UN 
deadlines and renewed European diplomatic efforts failed, the 
Security Council imposed limited sanctions in December 2006. 
No substantial progress was made to resolve the issue as of late 
2007. 

Relations with Neighboring Arab Countries 

After Khatami was elected, Iran also made concerted efforts 
to improve its relations with neighboring Arab countries. 
These relations had begun to thaw under Rafsanjani, and con- 
siderable progress had been achieved in bilateral relations with 
Kuwait, Oman, Qatar, and Saudi Arabia. According to scholars 
of Saudi foreign policy, the Saudi attitude toward Iran began to 
change in 1995, after the Saudi government decided to 
improve relations with its own Shia minority. As Saudi leaders 
ceased to view their Shia minority as a potential security threat, 
they gradually perceived Iran less as a source of subversion 
among this minority. This new attitude then eased the way for 
improved relations. The symbolic manifestation of the new cor- 
diality was an exchange of official visits by the two heads of state 
in late 1997 and early 1998. This unusual exchange was fol- 
lowed in May 1998 by a comprehensive cooperation agreement 
and in April 2001 by a security agreement between the two 
countries. 

Iran's relations with most other Arab countries also 
improved in the 1990s. Unrest among the majority Shia popu- 
lation of Bahrain, which the Sunni (see Glossary) monarchy 
there viewed as a security threat, had persisted throughout the 
1980s and early 1990s, and the government suspected Iran of 
providing clandestine support to Bahrain's Shia dissidents. 
Saudi Arabia's rapprochement with its Shia minority put pres- 
sure on the government of Bahrain to accommodate some 
demands of its Shia majority. As sectarian tensions abated in 
the mid-1990s, the concerns of Bahrain's rulers about potential 
Iranian subversive activities eased considerably, and this led to 
relatively amicable relations by the late 1990s. Iran even estab- 
lished a better relationship with its archfoe Iraq, as the two 
countries exchanged most or all of the remaining prisoners 
from the war they had fought in the 1980s. They also held sev- 



243 



Iran: A Country Study 

eral high-level diplomatic meetings between 1997 and 2002. In 
the early stages of the 2003 conflict in Iraq, Iran adopted a neu- 
tral stance (see Contemporary Security Policy, ch. 5). 

The only Persian Gulf Arab country whose relations with 
Iran did not improve substantially was the United Arab Emir- 
ates (UAE), which continued to dispute the sovereignty of 
three islands in the Persian Gulf, Abu Musa and the two Tunbs. 
The dispute over the islands had been dormant until 1992, 
when the UAE accused Iran of violating the 1971 accord on 
shared sovereignty of Abu Musa and also demanded that Iran 
end its occupation of the Tunbs. Although the dispute has per- 
sisted as an irritant in Iran-UAE relations, it has not affected 
trade between the two countries. The UAE, principally the 
emirate of Dubai, annually exports consumer goods valued at 
several billion U.S. dollars to Iran. 

Relations with other Middle Eastern Countries 

In the late 1990s, Iran began a dialogue with Egypt, which 
had been a bitter foe since the early days of the Islamic regime. 
The normalization of relations between Iran and Egypt was 
stalled for several years by Iran's refusal to rename a Tehran 
street honoring the assassin of Egyptian President Anwar Sadat. 
Although Iran's parliament finally voted to change the street's 
name in January 2004, other issues stalled the resumption of 
full diplomatic ties. Nevertheless, Iran's relations with Egypt 
improved substantially between 1997 and 2005. Meanwhile, 
relations with Egypt's southern neighbor, Sudan, which were 
not close during most of the 1980s, became cordial after a 1989 
coup brought to power a military government allied with a 
Sudanese Islamist political party led by Hasan al-Turabi. How- 
ever, relations deteriorated gradually throughout the 1990s 
because of Turabi's persistent criticism of Shias for not being 
"complete Muslims." Relations with Sudan improved after that 
country's rulers broke with Turabi and his followers in late 
1999. 

Iran continued to have a good working relationship with 
Syria under Khatami, despite Syria's secularist orientation. 
Trade (primarily Iran's concessionary sales of oil to Syria), tour- 
ism (particularly the visits of several thousand Iranian pilgrims 
per year to Syria) , and a shared view of Middle Eastern security 
issues were important aspects of this relationship. Prior to 
2005, Syria was a main conduit for Iran's relations with Leba- 
non. The largest religious community in multiconfessional 



244 



Government and Politics 



Lebanon is composed of Shia Muslims, and Iran's interest in 
this group's welfare long predates the Islamic Revolution of 
1978-79. Beginning in the early 1980s, Iran maintained direct 
relations with both Lebanese Shia armed political factions, 
Amal and Hizballah, sometimes mediating conflicts between 
the rivals. Following the end of Lebanon's 15-year civil war in 
1990, that country's central government tried to persuade Iran 
not to provide direct assistance, especially arms, to Amal and 
Hizballah. But Lebanon's de facto political dependence on 
Syria meant that Iran could ignore the government's entreat- 
ies. The withdrawal of all Syrian military forces and intelligence 
agents from Lebanon in 2005 and the presence of Hizballah as 
a political party in the coalition government that came to 
power in Lebanon in July 2005 reinforced Iran's position in 
Lebanon. Iran reportedly lent support to Hizballah's conflict 
with Israel in mid-2006. 

In the early 2000s, Iran's relations with Lebanon and Syria 
were intertwined with its policy toward Israel. Iran has sup- 
ported the position of both countries that the Israeli occupa- 
tion of parts of their territories (part of southern Lebanon 
from 1978 until 2000 and Syria's Golan Heights since 1967) is 
illegal under international law, as is the Israeli occupation of 
the Palestinian territories known as the West Bank, along the 
Jordan River, and the Gaza Strip. Like Lebanon and Syria, Iran 
held that the creation of Israel in 1948 on land that a UN parti- 
tion resolution had allotted to a Palestinian state was a violation 
of that resolution and therefore illegal. For that reason, Iran 
refused to extend diplomatic recognition to Israel. In fact, one 
of the very first foreign policy initiatives of the provisional gov- 
ernment in February 1979 was to rescind the de facto recogni- 
tion that the shah had granted to Israel in the early 1960s and 
to turn the Israeli trade mission in Tehran over to the Palestine 
Liberation Organization (PLO). Iran's relations with the PLO 
ended a year later, when the PLO expressed support for Iraq's 
invasion of and subsequent eight-year war with Iran. After 
Israel and the PLO signed the Oslo Accord on mutual recogni- 
tion in 1993, President Rafsanjani announced a position that 
remained Iran's official policy on Israel and the Palestinians for 
the remainder of his term and throughout the Khatami admin- 
istration: The peace process did not provide a just procedure 
for dealing with the issue of Palestinian refuges from 1948, but 
Iran would not oppose any agreement with Israel that the Pal- 
estinian people accepted. The regime of Mahmoud Ahmadine- 



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Iran: A Country Study 



jad, however, took a harder overall line toward Israel, 
expressed by several virulent attacks in presidential speeches. 

The peace process between Israel and the PLO had col- 
lapsed by winter 2001; PLO officials then established clandes- 
tine contacts with officials in Iran about obtaining weapons for 
the police forces of the governing Palestinian Authority. In Jan- 
uary 2002, Israeli commandos intercepted the freighter Karine 
A in the Mediterranean Sea, carrying 50 tons of Iranian weap- 
ons. The Khatami government denied any involvement in the 
shipment, whose origin remained unclear. Whatever its origin, 
the Karine A affair, occurring only a few months after the Sep- 
tember 11, 2001, terrorist attacks in the United States, had a 
fateful impact on the U.S. perception of Iran's role in the fight 
against terrorism. 

With a few notable exceptions, Iran's relations with the other 
non-Arab countries in the region have been pragmatic, if not 
cordial, both during and after the Khatami presidency. In the 
1980s and early 1990s, Iran and Turkey maintained diplomatic 
relations and engaged in considerable trade, despite the fact 
that armed Kurdish groups, particularly the Kurdistan Work- 
ers' Party (known by its Kurdish initials, PKK), staged attacks in 
both directions across their mutual border, and despite the 
Turkish government's avowed secularism and close relations 
with the United States and Israel. During the Khatami era, 
Iran's relations with Turkey remained good, with increased 
trade and Turkish investment in Iran. In the wake of the U.S. 
occupation of Iraq, Iran and Turkey have increasingly shared 
anxiety about increased activity by their respective Kurdish 
minorities. However, in the winter of 2006 Iran abruptly cut 
deliveries of natural gas to Turkey, and Turkey's public position 
against Iran's nuclear program also caused friction. Turkey's 
growing security cooperation with Israel is another matter of 
concern for Iran, as is competition with Turkey over pipeline 
routes from the Caucasus Mountains. 

Relations with Neighbors to the North and East 

Iran has enjoyed generally good relations with Russia and 
most of the other former Soviet republics since the breakup of 
the Soviet Union in 1991. In 1995 Russia agreed to finish con- 
struction of a large nuclear power reactor in the southern Ira- 
nian city of Bushehr, despite intense opposition from the 
United States. Russia's extensive trade with Iran has included 
the sale of military equipment. In addition, the two countries 



246 



Government and Politics 



cooperated closely between 1996 and 2001 to support former 
Afghan government forces fighting against the Taliban govern- 
ment in Afghanistan. Iran meanwhile continued to maintain a 
cordial relationship with the former Soviet republics of Central 
Asia, building important pipeline and rail connections with 
Turkmenistan, for example. 

The one country among its northern neighbors with which 
Iran has not had cordial relations is Azerbaijan. Iran provided 
de facto assistance to Armenia during the 1992-94 war between 
Armenia and Azerbaijan over the Armenian-populated prov- 
ince of Nagorno-Karabakh in Azerbaijan. That war was a disas- 
ter for Azerbaijan, ending with Armenia in control not only of 
Nagorno-Karabakh but also of the Azerbaijani territory 
between Armenia and Nagorno-Karabakh. Possibly in retalia- 
tion, Azerbaijan has not cooperated with Iran on issues of con- 
cern to Tehran, such as the decline of caviar-producing 
sturgeon and increased pollution of the Caspian Sea. Further- 
more, newspapers and politicians in Azerbaijan continue to 
assert territorial claims on Iran's Azeri-speaking provinces of 
East and West Azarbaijan. Although such claims are not offi- 
cial, they have provoked angry responses from Tehran. Iran has 
cultivated closer relations with Armenia in economic and trans- 
portation policy, building a new pipeline and a new railroad 
across the mutual border. 

Iran's relations with its eastern neighbors have been com- 
plex. In Afghanistan, the Taliban seized Kabul in 1996 after 
defeating the various Tajik, Uzbek, and Hazara militias that 
subsequently formed the Northern Alliance in a small area of 
northeastern Afghanistan outside Taliban control. Iran sup- 
ported the Northern Alliance because it disliked the Taliban's 
puritanical, anti-Shia Islamist ideology and believed that the 
Taliban was a tool of Pakistan. In August 1998, Taliban forces 
executed several captured Iranian diplomats. In response, Iran 
massed some 250,000 troops along its Afghan border and seri- 
ously contemplated invading the country. In subsequent years, 
Iran continued to work against the Taliban, even cooperating 
with the United States in the overthrow of the Taliban govern- 
ment in late 2001 (see The United States and Iran, this ch.). In 
2006 Iran was supporting anti-Taliban and anti-U.S. conserva- 
tive forces in Afghanistan in an effort to solidify its influence in 
that country. 

Iran and Pakistan maintained correct relations in the 1980s 
and early 1990s, but tensions existed between them as they sup- 



247 



Iran: A Country Study 



ported different Afghan resistance forces against the Soviet- 
backed government in Afghanistan. After 1992, Iran also 
believed that Pakistan was largely responsible for creating and 
supporting the Taliban. Suspicions about Pakistan led Iran to 
develop closer ties with India, which also helped support the 
Northern Alliance. Trade between India and Iran became 
important by the 1990s, and the two countries began to discuss 
plans to build a pipeline to transport natural gas from Iran to 
both Pakistan and India. In 2003 the two countries signed a 
comprehensive partnership agreement, and India has not been 
critical of Iran's nuclear program. Plans for a pipeline route 
and the financing of construction costs were finalized in 2005. 

Despite Iran's reservations about Pakistan's policies in 
Afghanistan, sometime in 1992 or later A.Q. Khan, the head of 
Pakistan's nuclear program, began to sell Iran plans and tech- 
nology for producing nuclear fuel enriched to levels suitable 
for use in weapons. This activity only was revealed in 2002 by 
the government of Pakistan, which claimed no prior knowl- 
edge of the secret sales. The revelations caused Iran to admit 
that it had constructed an elaborate network of facilities for 
conducting research and experiments on nuclear fuel cycle 
activities. 

The United States and Iran 

The United States broke diplomatic relations with Iran in 
April 1980, during the hostage crisis, and relations had not 
been restored as of late 2007. Secret talks occurred between 
the United States and Iran in the mid-1980s, but their prema- 
ture revelation was an embarrassment for both countries. Con- 
sequently, even though the talks had been approved at the 
highest levels in Tehran and Washington, some Americans and 
some Iranians involved in them were punished by their respec- 
tive governments. New, tentative overtures toward normalizing 
relations were undertaken during the presidential administra- 
tions of George H.W. Bush and Ali Akbar Hashemi Rafsanjani, 
but these did not bear fruit by the end of Bush's term in 1993. 
The administration of William J. Clinton, which followed, had 
a more suspicious view of Iran. In early 1993, it announced a 
policy of dual containment to isolate both Iran and Iraq. Two 
years later, an executive order forbade U.S. firms and individu- 
als from trading or having any financial transactions with Iran, 
and in 1996 the Iran-Libya Sanctions Act (ILSA) expanded 
economic sanctions against Iran. Consequently, when Khatami 



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Government and Politics 



took office as president of Iran in 1997, the United States was 
not positioned to respond quickly to the opportunities his 
administration presented. 

In a series of statements during his first few months in office, 
Khatami called for better relations with the West and, specifi- 
cally, closer ties with the United States. In an extraordinary 
interview broadcast in January 1998, he expressed "great 
respect" for the American people, condemned the use of ter- 
rorism, and again called for closer U.S. ties. American officials 
reacted cautiously to these overtures, making a few minor ges- 
tures such as listing the Mojahedin-e Khalq as a terrorist orga- 
nization. However, the United States continued to insist that 
any bilateral discussions with Iran focus on its nuclear pro- 
gram, its alleged support for terrorist groups, and its opposi- 
tion to the Israeli-Palestinian peace process — preconditions 
that Iran had rejected repeatedly in the past. A few weeks after 
Khatami's interview, Khamenei further undermined the pros- 
pects for rapprochement in a major speech, stating that the 
United States was Iran's "enemy" and making it clear that he 
opposed better relations as long as Washington continued to 
act "arrogantly" toward Iran. Other conservatives quickly 
joined Khamenei in denouncing the United States, thereby 
politicizing the issue of U.S relations and making it difficult for 
Khatami to move forward. However, while relations between 
the two governments remained problematic during this period, 
many U.S. NGOs became much more active in Iran. 

In June 1998 — more than a year after Khatami was elected — 
U.S. Secretary of State Madeleine Albright laid out a "road 
map" to achieve better bilateral relations. U.S. officials made 
several minor gestures toward Iran during 1998 as well, declin- 
ing to apply sanctions to third-country firms investing in Iran 
(as provided for in the ILSA), working with Iranian officials in 
a UN committee on Afghanistan, and removing Iran from the 
U.S. list of countries involved in illicit drug transit or produc- 
tion. In April 1999, the United States authorized sales of food 
and medicine to Iran. Iranian officials generally found these 
gestures positive but considered them small steps that did not 
address the crippling economic sanctions that remained in 
force. Moreover, faced with increasing criticism from the con- 
servatives beginning in 1998, Khatami and his allies concluded 
that whatever benefits might result from responding positively 
to these limited U.S. actions were outweighed by the high 
domestic political costs of doing so. 



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Iran: A Country Study 



Despite Iran's tepid response, U.S. officials continued efforts 
to promote rapprochement until the Clinton administration 
left office in January 2001. The high point of this initiative 
came in March 2000, when Albright officially acknowledged 
the U.S. role in overthrowing Iranian prime minister Moham- 
mad Mossadeq in 1953, lifted restrictions on U.S. imports of 
Iranian food products and carpets, and identified areas where 
the United States and Iran could cooperate. However, Albright 
also pointedly criticized Iran's "unelected officials" — an obvi- 
ous reference to Khamenei and other key conservatives. Pre- 
dictably, Khamenei's negative reaction to Albright's speech 
nullified the important concessions she had made. 

When George W. Bush was elected U.S. president in Novem- 
ber 2000, the prospects of continued rapprochement with Iran 
seemed good. However, the Bush administration did not con- 
tinue its predecessor's efforts. The administration's review of 
Iran policy was interrupted by the terrorist attacks of Septem- 
ber 11, 2001; Iranian officials expressed deep sympathy over 
the loss of life and then gave assistance to the United States as 
it attacked the forces of the Taliban and the terrorist group al 
Qaeda in Afghanistan. Iran facilitated U.S. contacts with the 
Northern Alliance, allowed U.S. forces to use Iranian territory 
and airspace for various purposes, and worked closely with U.S. 
officials to set up a post-Taliban government. Although Iran 
clearly had an interest in helping to overthrow the Taliban, the 
Iranian assistance seemed to be a deliberate, positive gesture 
toward the United States. 

Before the Bush administration decided on whether to 
reciprocate Iran's gesture in Afghanistan, the Karine A incident 
of January 2002 had the effect of putting Iran into the camp of 
supporters of terrorism, as seen from the U.S. perspective. Sev- 
eral weeks later, in his State of the Union address, Bush linked 
Iran with Iraq and North Korea in an "axis of evil." Iranian offi- 
cials were angered that the United States had ignored the assis- 
tance they had provided in Afghanistan and had put Iran in the 
same category as Iraq, whose government, in their view, had 
committed acts of incomparable brutality. 

The "axis of evil" characterization initiated a new period of 
mutual recriminations between Iran and the United States. 
Although Iran did not end its cooperation with the United 
States in Afghanistan, contacts were scaled back considerably, 
and misunderstandings were more common than consensus 



250 



Government and Politics 



during 2002 and 2003. Iranian forces arrested some al Qaeda 
members who fled into Iran. 

Iraq became another arena for cooperation and conflict 
with the United States. On the one hand, Iran did not welcome 
the prospect of a large American military force occupying Iraq. 
On the other hand, it did welcome Saddam Hussein's removal 
from power and the opportunity for Iraq's Shias finally to gain 
representation in national government. Iran's main ally in Iraq 
was the Supreme Council for the Islamic Revolution in Iraq 
(SCIRI), which had been based in exile in Iran since 1980, and 
whose militia returned to Iraq soon after the U.S. invasion of 
March 2003. Iran's relations with the SCIRI have provided it 
with influence in Iraq, but Iraq's large Shia community (esti- 
mated at 55 percent of the country's population) did not unite 
around a single political party. 

The initial U.S. victory in Iraq prompted some official talk in 
Washington of the need for "regime change" in Iran. This lan- 
guage put Khatami and the reformists on the defensive, forcing 
them to demonstrate their loyalty to Iran by denouncing the 
United States as strongly as did the conservatives. By 2004, how- 
ever, the rhetoric had abated, and both Iran and the United 
States seemed to have reverted to ambivalent attitudes toward 
each other. Washington continued to cite the need for "free- 
dom" in Iran while simultaneously stressing the value of negoti- 
ations with Tehran on its nuclear program. In March 2005, 
Bush agreed with his EU allies that they should offer Iran a car- 
rot if it would abandon efforts to enrich uranium for fuel: The 
United States would drop its opposition to Iran's application 
for membership in the World Trade Organization. In 2006 and 
2007, there was persistent media speculation about a possible 
U.S. attack on or invasion of Iran, as tensions continued and 
negotiations failed to resolve issues. 

Tensions around the nuclear issue diminished in the fall of 
2007 when an official U.S. government intelligence report 
declared that Iran likely ceased work on its nuclear weapons 
program in 2003. However, the Bush administration main- 
tained that the nuclear program represented an ongoing dan- 
ger because of Iran's continued enrichment of uranium and 
that Iran's support of terrorist organizations in the Middle East 
remained unacceptable. 



* * * 



251 



Iran: A Country Study 

The most comprehensive analysis of Iran's political dynam- 
ics, especially the development of the political struggles 
between the reformists and conservatives during the 1990s, is 
Mehdi Moslem, Factional Politics in Post-Khomeini Iran. An 
updated account, which covers Khatami's second administra- 
tion and the initial months of Ahmadinejad's presidency, is Ali 
Gheissari and Vali Nasr, Democracy in Iran: History and the Quest 
for Liberty. Several journalists who were stationed in Iran for a 
year or more also have written informative accounts of post- 
1999 politics; these books include Geneive Abdo and Jonathan 
Lyons, Answering Only to God: Faith and Freedom in Twenty-First- 
Century Iran; Christopher de Bellaique, In the Garden of the Mar- 
tyrs; Azadeh Moaveni, Lipstick Jihad; and Afshin Molavi, The Soul 
of Iran. For a thorough description of Iran's governmental insti- 
tutions, see Wilfried Buchta, Who Rules Iran ? This book may be 
supplemented by Bahman Baktiari's Parliamentary Politics in 
Revolutionary Iran: The Institutionalization of Factional Politics, a 
detailed analysis of the first and second postrevolutionary par- 
liaments, and Kian Tajbakhsh's article on local government 
councils, "Political Decentralization and the Creation of Local 
Government in Iran." 

On the development of political parties and civil society orga- 
nizations, articles by the following scholars provide useful 
insights: Hossein Akhavi-Pour and Heidar Azodanloo, Mark 
Gasiorowski, Arang Keshavarzian, Farhad Khosrokhavar, and 
Azadeh Kian-Thiebaut. An interesting account of the legal cam- 
paign to institutionalize basic human rights protections is the 
memoir by Iran's Noble Peace Prize laureate, Shirin Ebadi, Iran 
Awakening. Specific human rights issues are covered by Ervand 
Abrahamian in Tortured Confessions and Reza Afshari in Human 
Rights in Iran. On this topic, also see the annual reports of 
Amnesty International, Middle East Watch, and Reporters With- 
out Borders. Mass media and the arts, especially cinema, are 
covered in Hamid Dabashi, Close-Up, as well as in the collection 
of articles, The New Iranian Cinema, edited by Richard Tapper. 

The article by Arshin Adib-Moghaddam, "Islamic Utopian 
Romanticism and the Foreign Policy Culture of Iran," provides 
a succinct overview of the ideological premises that underlie 
the foreign policy of the Islamic Republic of Iran. Other 
aspects of general Iranian foreign policy are analyzed in arti- 
cles contained in the edited volume by Eric Hooglund, Twenty 
Years of Islamic Revolution. U.S.-Iranian relations since the 1978- 
79 Revolution are examined in William O. Beeman, The "Great 



252 



Government and Politics 



Satan " vs. the "Mad Mullahs ": How the United States and Iran 
Demonize Each Other, James A. Bill, The Eagle and the Lion; and in 
articles by Eric Hooglund, R.K. Ramazani, and Gary Sick. The 
issue of Iran's nuclear development program is discussed in Ali 
Ansari's Confronting Iran: The Failure of American Foreign Policy 
and the Next Great Crisis in the Middle East. (For further informa- 
tion and complete citations, see Bibliography.) 



253 



Chapter 5. National Security 



A sword and scabbard from a bas-relief at Persepolis, ca. 500 B. 



UNTIL THE MID-1960S, IRAN'S NATIONAL security strategy 
had an internal focus. The primary objective was to develop and 
deploy a strong national military that would put a conclusive 
end to resistance by tribal groups, which, as late as the 1920s, 
had maintained autonomy over portions of the Iranian country- 
side. After suppressing the last major tribal rebellions, the mili- 
tary began to focus on potential external threats. In 1968 two 
developments combined to elevate the Persian Gulf region as a 
primary security concern: the announcement by Britain that it 
would withdraw its military forces from the Persian Gulf sheikh- 
doms and grant its protectorates there full independence, and a 
coup d'etat by the Sunni Baathist Party in Iraq. By the early 
1970s, Iran was providing military support to a Kurdish uprising 
in northern Iraq against the Baathist regime and had dis- 
patched a contingent of troops to Oman to oppose an anti- 
monarchical movement that had occupied the southern half of 
that country. Although a 1975 treaty temporarily resolved the 
problems with Iraq, the Islamic Revolution of 1978-79 weak- 
ened Iran's internal and external security. Within a few months 
after the Revolution, counterrevolutionary groups, tribes, and 
various ethnic minorities were engaging in armed conflict with 
government security forces. Then, in September 1980 Iraqi 
ground troops moved across the entire Iran-Iraq border, begin- 
ning a costly eight-year war of attrition that has had a lasting 
effect on Iran's security policy. 

After 1979, a combination of internal instability and external 
pressures resulted in a state structure that relied on a strong 
military to deter foreign threats and assert domestic authority. 
Factional politics and increasingly problematic relations with 
the international community further complicated Iran's secu- 
rity policy. The Iran-Iraq War taught Iran that military inde- 
pendence was vital and that command of the air was the most 
important factor in military success. In the decades following 
the war with Iraq, Iran coped with an international arms 
embargo by piecing together military technology and incom- 
plete inventories of weapons, vehicles, and aircraft. Meanwhile, 
it slowly assembled a missile force capable of ensuring regional 
domination. Concerned that Iran had clandestinely developed 
facilities to process nuclear fuel potentially applicable to 
nuclear weapons manufacture, the international community 



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Iran: A Country Study 



applied various diplomatic and economic strategies to per- 
suade Iran to discontinue its uranium enrichment program. 
The controversy over the nuclear energy program has stronglv 
influenced Iran's overall national security policy. 

The Armed Forces 
Historical Background 

TTie Military under the Pahlavi Shahs 

Iran's twentieth-century army was formed by Reza Khan, who 
became minister of war in 1921, prime minister in 1923, and 
shah in 1925, taking the name Reza Shah Pahlavi (see The Era 
of Reza Shah, 1921-41, ch. 1). Supposedly created to defend 
the country from foreign aggression, the army became the 
enforcer of Reza Shah's internal security policies against rebel- 
lious tribes and political opposition groups. Between 1924 and 
1940, Reza Shah allocated between 30 and 50 percent of 
national expenditures to the army. He not only purchased 
modern weapons in large quantities but also created an air 
force and a navy as branches of the army in the 1920s. With the 
introduction of the new services, the army established two mili- 
tary academies to meet the ever-rising demand for officers. The 
majority of the officers continued training in Europe, however. 
By 1941 the army stood at 125,000 troops, five times its original 
size. Considered well trained and well equipped, it had gained 
a privileged role in society. Disloyalty to the shah, evidenced by 
several coup attempts, was punished harshly. The public per- 
ceived the military mainly as a tool to uphold the shah's dicta- 
torial regime. 

Disproving the high reputation of Iran's armed forces, in 
August 1941 British and Russian forces invaded Iran when Reza 
Shah, who had declared Iran neutral in World War II, refused 
to expel German nationals from the country. In three days, the 
invading forces decimated the Iranian army and completely 
destroyed the fledgling air force and navy. With his institu- 
tional power base ruined, the shah abdicated in favor of his 22- 
year old son, Mohammad Reza Shah (r. 1941-79 as Moham- 
mad Reza Shah Pahlavi) (see World War II and the Azarbaijan 
Crisis, ch. 1). 

Reza Shah's abdication in favor of his son did not slow the 
modernization of the army. In 1942 the United States sent mili- 
tary advisers to Iran to aid the new shah in reorganizing his 



258 



Members of the shah 's Imperial Iranian Armed Forces 



forces, thus establishing a relationship between the armed 
forces of the two nations that would last until the Revolution of 
1978-79. Beginning in 1946, the parliament (Majlis — see Glos- 
sary) put limits on the military budget to keep the army from 
resuming its role as a base of political power. Although deter- 
mined to build an effective military establishment, the shah was 
forced to accept the managerial control of the parliament. 
Mohammad Mossadeq, who with the support of the parliament 
gained the posts of prime minister (1951) and minister of war 
(1952), dismissed officers loyal to the shah. With the assistance 
of British and U.S. intelligence, however, officers who had been 
dismissed overthrew Mossadeq in August 1953 and re-installed 
the shah, who had fled the country (see Mossadeq and Oil 
Nationalization, ch. 1). Within two years, the shah consolidated 
his control of the armed forces. In this period, separate com- 
mands were established for the army, air force, and navy; all 
three branches of the military embarked on large-scale mod- 
ernization programs that continued to the end of the shah's 
reign in 1979. 

After the 1953 coup, the shah instituted an unparalleled sys- 
tem of control over all his officers. The monarch not only 
made all decisions pertaining to purchasing, promotions, and 
routine military affairs but also restricted interaction among 



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Iran: A Country Study 



his officers, who were forced to deal individually with their 
ruler. However, the absence of leadership at the general staff 
level and below that resulted from this practice literally para- 
lyzed the military as the Revolution gathered momentum in 
the fall and winter of 1978-79 (see The Coming of the Revolu- 
tion, ch. 1). In response to numerous mass demonstrations, the 
army lashed out heedlessly, killing and injuring numerous civil- 
ians. The most infamous such encounter occurred at Jaleh 
Square in Tehran in September 1978, shortly after martial law 
had been declared in Iran's major cities. In response to these 
incidents, demonstrators "attacked" army units, deployed to 
maintain order, with flowers. This tactic demoralized troops 
and caused conscripts to desert en masse. 

In early February 1979, continued mass demonstrations 
brought about a declaration of neutrality by the military, lead- 
ing to the collapse of the government left in power when the 
shah fled Iran in January. Installed in its place was a provisional 
government named by revolutionary leader Ayatollah Sayyid 
Ruhollah Musavi Khomeini. Within days, Khomeini and several 
other religious leaders announced that the armed forces had 
"returned to the nation" and cautioned against indiscriminate 
vengeance against service members. Nevertheless, large num- 
bers of the shah's former officers were dismissed or fled the 
country. 

The Postrevolutionary Period 

The new government took prompt steps to reconstitute the 
armed forces. Intent on remolding the shah's army into a loyal 
national Islamic force, Khomeini made radical changes in the 
senior officer corps and at the command-and-control level. 
Troops who had heeded Khomeini's appeal to disband were 
called back in March 1979, and a new command group of offic- 
ers with impeccable revolutionary credentials was established. 
General staff personnel were called back to coordinate the 
reorganization; division and brigade command positions were 
promptly filled by reliable officers. Only the personal guard 
units of the shah were permanently disbanded. 

To protect the new regime from counterrevolutionary 
threats during the period when the military was being 
reformed, a parallel military institution, the Islamic Revolution- 
ary Guard Corps (IRGC) or Revolutionary Guards (Pasdaran; 
in full, Pasdaran-e Enghelab-e Islami), was formed. The IRGC 
has been the most loyal and dominant armed force in Iran 



260 



National Security 



since the Revolution. Originally created as a protector of the 
regime, the IRGC became a full military force during the Iran- 
Iraq War (see Special and Irregular Armed Forces, this ch.). As 
a separate and parallel organization that eventually developed 
its own air and naval divisions, the IRGC became a rival of the 
regular armed forces. In 1989 this anomaly was resolved with 
the merger of all the military forces under a single command. 
A new position was created for the officer who would lead the 
combined forces: chief of staff of the armed forces and com- 
mander of the Gendarmerie (rural police). The influence of 
the IRGC on this joint structure is reflected in the fact that 
through the end of 2007 every person holding the position of 
armed forces chief of staff has been a senior IRGC officer. 

When war with Iraq broke out in September 1980, the 
Islamic Republic of Iran was both internally and externally vul- 
nerable and had no real defense strategy. Because Iran had nei- 
ther expected nor prepared for the war, Iraqi troops easily 
occupied parts of oil-rich Khuzestan Province. Having dis- 
carded its alliance with the United States in 1979 and joined 
the Non-Aligned Movement, Iran fought the entire war without 
significant military support from a friendly state, except for tac- 
tical support from Syria. In its search for weapons, the regime 
was even forced to deal, clandestinely, with putative enemies 
such as Israel and the United States. Politically, too, Iran had 
very few friends and soon entered into a phase of international 
isolation, even among Islamic countries. 

The Iran-Iraq War helped to lay the foundations for the geo- 
political and military conditions that influenced many of the 
security decisions of the 1990s. The war highlighted the inter- 
national isolation of Iran's new government and the regional 
pressures exerted by surrounding regimes. Furthermore, the 
war with Iraq forced Iran to address the problem of having two 
separate armed forces, one professional (the army) and the 
other voluntary and politically motivated (the IRGC). Coupled 
with a history of foreign intervention, manipulation, and 
exploitation, the events of the 1980s reinforced the desire for 
military self-reliance. 

The presidency of Ali Akbar Hashemi Rafsanjani, which 
began in 1989, saw substantial reorganization of Iran's national 
security establishment in response to the shortcomings 
revealed by the Iran-Iraq War. A central aim of this process was 
to professionalize Iran's irregular forces and reform them into 
a conventional military organization (see Command and Con- 



261 



Iran: A Country Study 

trol, this ch.). In the 1990s, the military reassessment process 
also emphasized acquisition of missiles and weapons of mass 
destruction (WMD), with the aim of making Iran capable of 
waging war independently of outside suppliers (see Arms 
Acquisition; Military Doctrine, this ch.). 

Beginning in 1991, international events presented new con- 
siderations for Iran's national security policy makers. The Per- 
sian Gulf War of 1991 brought large numbers of U.S. troops 
close to Iran's borders. The terrorist attacks of September 11, 
2001, again brought U.S. forces to the region, this time in both 
Afghanistan and Iraq. After lending some assistance to troops 
of the United States and the North Atlantic Treaty Organiza- 
tion (NATO) in Afghanistan, Iran remained neutral toward the 
U.S. invasion of Iraq in 2003 (see Contemporary Security Pol- 
icy, this ch.). 

Command and Control 

Early in his presidency, Rafsanjani took steps to streamline 
the army while encouraging the professionalization and institu- 
tionalization of the IRGC. In effect, the IRGC's ground forces 
were reorganized into 21 infantry divisions, 15 independent 
infantry brigades, 21 air defense brigades, 3 engineering divi- 
sions, and 42 armored, artillery, and chemical defense bri- 
gades. Some 21 new military ranks (from private to general, 
divided among the categories of soldiers, fighters, officers, and 
commandants) also were created. 

In 1989 the IRGC and the professional armed forces were 
amalgamated under the Ministry of Defense and Armed Forces 
Logistics (MODAFL) . This measure dissolved the separate min- 
istry that had run the IRGC, placing its command structures 
within the new MODAFL. The creation of the MODAFL 
allowed the regime to minimize potential threats from the rev- 
olutionary IRGC. Also, the assignment of ranks was a first step 
in professionalizing the IRGC, with the ultimate goal of further 
unifying the armed forces under a comprehensive defense 
umbrella. In further reforms, the Rafsanjani regime expanded 
the Joint Chiefs of Staff and created the General Command of 
the Armed Forces Joint Staffs. These changes strengthened the 
institution of the Joint Staff Office. Although resentment 
between the IRGC and the regular army still existed in the 
early 2000s, the Rafsanjani reforms resulted in more coopera- 
tion between the two forces. 



262 



National Security 



Under Article 110 of the constitution of 1979, the Iranian 
head of state (the Leader of the Revolution) has full authority 
to appoint and dismiss the chief of the Joint Staff, the com- 
mander in chief of the IRGC, and as many as two advisers to 
the Supreme Defense Council (SDC), the body responsible for 
strategic planning and development of military and defense 
policy. On the recommendation of the SDC, the Leader also 
can appoint or dismiss the commanders in chief of the ground, 
naval, and air forces. The Leader also has authority to supervise 
the activities of the SDC, and, on its recommendation, to 
declare war and mobilize the armed forces. As Leader, 
Khomeini maintained the role of final arbiter, but he delegated 
the post of commander in chief to the president (see The Pres- 
ident and Cabinet, ch. 4). 

Article 110 stipulates that the SDC consist of the president, 
minister of defense, chief of the Joint Staff of the Armed 
Forces, commander in chief of the IRGC, and two advisers 
appointed by the Leader. Other senior officials may attend 
SDC meetings to deliberate on national defense issues. In the 
past, the minister of foreign affairs, minister of interior, com- 
manders in chief of the air force and navy, and others have 
attended meetings. The council has representatives at opera- 
tional area and field headquarters to provide political and stra- 
tegic guidance to field commanders. SDC representatives may 
veto military decisions. 

There are two chains of command below the SDC: one 
administrative, the other operational. To some extent, this dual 
chain of command is a holdover from the organizational struc- 
ture of the Imperial Iranian Armed Forces, which was modeled 
on the U.S. division of powers between the administrative func- 
tions of the service secretaries and the operational functions of 
the secretary of defense and the chiefs of staff. In addition, gov- 
ernment leaders saw this structure as a way to limit friction 
between the regular military and the IRGC. 

In this dual structure, the MODAFL handles administrative 
matters for the entire armed forces. The administrative chain 
of command flows upward from senior unit commanders (divi- 
sion, wing, and fleet) to intermediate-echelon service com- 
manders and to service commanders in chief and their staffs. 
Similarly, during its existence the Ministry of the Islamic Revo- 
lutionary Guard Corps handled the administrative affairs of the 
IRGC. The operational chain of command flows upward from 
senior unit commanders (operational brigades in the case of 



263 



Iran: A Country Study 



combat units) to the ministry staff officers. Even though the 
Ministry of Defense oversees the entire armed forces, the IRGC 
continues to benefit from a unique and distinguished status 
compared to the regular army. After the election of Mahmoud 
Ahmadinejad as president in June 2005, there was some indica- 
tion that the operational chain of command would be weak- 
ened in order to mitigate the decision-making authority 
possessed by operational officials. 

Decision Making 

Iran's decision-making system is a complex of competing 
influences whose conflicts are resolved through a culturally 
prescribed consensus procedure. Power distribution within the 
system rests on the personal relationships of the primary actors 
rather than on a formal set of rules and regulations. The com- 
plex relationships within the hierarchy of the regular military 
and the parallel IRGC military organization, and the relation- 
ships of those organizations with informal power centers, are 
based on clan and family. Nevertheless, the decisions of mili- 
tary leaders generally are heavily influenced by decisions con- 
veyed to them before their "deliberation" process begins. 
Because the Leader's judgment rarely is questioned, no system 
of checks and balances exists in most cases. Senior religious fig- 
ures often involve themselves in military decision making, 
which has resulted in unsuccessful outcomes when expert anal- 
ysis was contravened. The hierarchical system, maintained by 
the emphasis on consensus, discourages "rogue actions." 

Organization, Size, and Equipment 

Army 

The estimated force level of the regular army increased from 
325,000 in 2001 to 350,000 in 2007 (see table 12, Appendix). 
Of that number, an estimated 220,000 were conscripts. Most of 
the personnel who gained combat experience in the Iran-Iraq 
War had left military service by the mid-1990s. Experts do not 
rate Iran's military training highly, so the potential combat per- 
formance of the ground forces is unknown. 

After the Revolution, the army underwent a structural reor- 
ganization. The ground forces of the Imperial Iranian Armed 
Forces had been deployed in six divisions and four specialized 
combat regiments that were supported by more than 500 heli- 
copters and hovercraft. Following the Revolution, the army was 



264 



National Security 



renamed the Islamic Iranian Ground Forces (IIGF). In 2006 
the IIGF comprised four armored divisions, each with three 
armored brigades, one mechanized brigade, and four or five 
artillery battalions; six infantry divisions; two commando divi- 
sions; one airborne brigade; one special forces brigade; six 
artillery groups; and aviation support units. 

Prior to the Revolution, Iran had purchased materiel for its 
ground forces from many countries, including the United 
States, the United Kingdom (UK), France, the Federal Repub- 
lic of Germany (West Germany), Italy, and the Soviet Union. 
With access to many of its traditional suppliers restricted dur- 
ing the Iran-Iraq War, Iran made selective purchases from a 
wide variety of suppliers, including the Democratic People's 
Republic of Korea (North Korea) , China, Brazil, Israel, and the 
Soviet Union. The diversity of the weapons purchased from 
these countries greatly complicated training and supply proce- 
dures. Nevertheless, by 2000 Iran had done much to restock its 
arsenal, most notably by the addition of 72 combat aircraft and 
108 heavy artillery weapons. 

Iran's army relies primarily on main battle tanks of Soviet 
manufacture, together with some from China and the UK and 
100 domestically produced Zulfiqar tanks (see table 13, Appen- 
dix) . Armored units suffer from a lack of spare parts for their 
foreign tanks and from the obsolescence of most models, 
although the size of the armored force increased significantly 
in the late 1990s. The Zulfiqars and the Soviet T-72s on which 
they are based are the most advanced main battle tanks in the 
arsenal. Most of Iran's armored personnel carriers (APCs) and 
armored vehicles, together totaling 1,250 units in 2006, are 
Soviet models, supplemented by the 1960s-vintage U.S. M-113 
and the domestically produced Boragh APC, which is based on 
a Soviet armored vehicle, the BMP. 

Iran's artillery units depend heavily on towed rather than 
self-propelled guns. The predominant type of towed artillery is 
the M-46 field gun (985 of which were in service in 2006) , first 
produced in the 1950s by the Soviet Union and China. More 
than two-thirds of self-propelled artillery pieces are U.S.-made 
M-107 and M-109 howitzers. Nearly all of Iran's multiple- 
rocket launchers are 107-mm and 130-mm pieces from the 
Type 63 series, developed by China in the 1960s. Some launch- 
ers of Iranian origin also are in service. Most of the 1,700 oper- 
able antiaircraft guns are of Soviet manufacture. The surface- 



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to-surface rocket arsenal includes modified Soviet Scud-Bs and 
several models of domestic origin. 

Most of the aircraft flown by the army's aviation units are 
U.S.-made holdovers from the Pahlavi era. Some helicopters of 
Italian manufacture and 25 Russian-made Mi-8 and Mi-17 heli- 
copters have been added. 

Navy 

Because of the need to defend the Persian Gulf waterway, 
the navy is an essential combat arm. However, in 2007 that 
branch, always the smallest of the three services, had only 
about 18,000 personnel (including 2,600 in naval aviation and 
2,600 marines), most of whom had limited experience. The 
navy operates bases at Bandar-e Abbas, Bushehr, Khark Island, 
Bandar-e Anzali, Bandar-e Khomeini, Bandar-e Mah Shahr, and 
Chabahar. The capabilities of the navy have been limited by 
insufficient resources. Spare-parts shortages have plagued the 
navy more than the other services because Western naval mate- 
riel is less widely available on world arms markets than materiel 
for the other branches. In particular, arms import limitations 
in the late 1990s and early 2000s hampered development of 
amphibious warfare capabilities. 

With some of the navy's ships and weapons more than 50 
years old, modernization is essential to achieving force readi- 
ness. In 2001 naval authorities announced that to achieve naval 
self-sufficiency Iran would begin building naval craft equipped 
with rocket launchers, as well as advanced gunboats and 
destroyers and missile launcher frigates. However, that plan 
had not materialized by mid-decade. In 2005 some 10 French- 
built Kaman missile patrol boats, carrying Chinese C-802 sur- 
face-to-surface missiles (first acquired in the 1990s, now being 
manufactured in Iran), were in service. Three 30-year-old 
Alvand guided missile frigates, four 35-year-old minesweepers, 
and two 35-year-old Bayandor corvettes also were in service. 
The operational capabilities of all those vessels were regarded 
as poor. The navy had no fixed-wing combat aircraft, and its 
reconnaissance aircraft were all at least 30 years old. All naval 
air equipment suffers from parts shortages and poor mainte- 
nance. Iran is believed to have manufactured sophisticated 
mines, using Chinese and Russian technology, which could be 
used to block the strategically vital Strait of Hormuz (see fig. 
12). In 2005 the navy had three Soviet-era Kilo-class attack sub- 



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marines. A new type of minisubmarine called the Qadir went 
into limited production in 2005. 

Air Force 

In the early 2000s, Iran's air force was relatively small, with 
an estimated 52,000 active personnel (including 15,000 
assigned to air defense units) and an aging fleet of combat air- 
craft. After suffering severe losses in the Iran-Iraq War and los- 
ing access to U.S. equipment, Iran made some improvements 
in its combat aircraft fleet in the early 1990s by purchasing 
fighter jets from Russia, its main supplier of such items since 
the Revolution. The arms import reductions of the late 1990s 
and early 2000s resulted in a failure to modernize the air force 
and ground-based air defenses. 

After a steady buildup by the shah in the 1970s, the air force 
had about 450 modern aircraft and nearly 100,000 personnel, 
making it the most advanced of Iran's three services. Because 
most of the new equipment had come from the United States, 
a significant portion of Iran's aircraft probably were cannibal- 
ized for spare parts during the first decade after the Revolu- 
tion. The air force also was reorganized and substantially 
reduced in size during this period. 

Iran acquired some Chinese and North Korean aircraft in 
the late 1980s, and in 1991 it made its last large-scale purchase 
of combat aircraft, consisting mainly of Soviet-made fighter 
and attack jets in the MiG-27, MiG-29, MiG-31, Su-24, and 
Su-25 series. A few Su-25 fighter jets reportedly were delivered 
to the IRGC in 2003. In the early 2000s, the most important 
combat element of the Iranian air force consisted of 30 Su-24 
Fencer and 25 MiG-29A Fulcrum fighter jets. An estimated 80 
percent of these Soviet-era aircraft were serviceable during that 
period. The air force also had seven Su-25 Frogfoot ground 
attack fighters of Russian manufacture. In 2005 Iran had only 
about 150 aging U.S.-built aircraft left. These included 65 F- 
4D/E interceptors and 60 F-5E/F fighters, about 60 percent of 
which were rated as serviceable in 2002. Iran has long tried to 
maintain its U.S.-made fighters, despite the U.S. arms embargo, 
by purchasing spare parts through third parties. Reportedly, in 
2004 Iran ordered a number of Super-7 fighters, an upgrade 
of the J-7 design developed by China's Chengdu Aircraft Cor- 
poration. A 2005 arms agreement with Russia provided for 
modernization of MiG-29 fighter jets and Mi-8 helicopters. 
Some of the MiG-29s had been flown by the Iraqi air force to 



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Iran for sanctuary during the Persian Gulf War. Iran purchased 
the remaining fighters and the helicopters in the early 1990s. 
The air force has limited air refueling capability. 

In 2007 some 14 military air bases were in operation. Air 
force combat forces were organized in nine ground-attack 
fighter squadrons, five fighter squadrons, and one reconnais- 
sance squadron. The air force's primary maintenance facility is 
located at Mehrabad Air Base near Tehran. The nearby Iran 
Aircraft Industries has supported the air force maintenance 
unit and provided spare parts. Several less important facilities 
are located at air bases in the south and near Tehran (see Arms 
Acquisition, this ch.). 

Special and Irregular Armed Forces 

The stresses that the Iran-Iraq War placed on Iran's military 
establishment were an important factor in the growth of the 
Islamic Revolutionary Guard Corps (IRGC) and another unof- 
ficial military group, the Basij, or Popular Mobilization Army, a 
subordinate to the IRGC. After existing in parallel during the 
1980s, these two organizations were merged as part of the com- 
prehensive force unification in the 1990s. However, the IRGC 
retained substantial independence as an auxiliary military 
force. 

The Islamic Revolutionary Guard Corps (IRGC) 

With the downfall of the monarchy in 1979, many of the 
shah's generals left Iran or were executed or purged. As a 
result, during the war with Iraq the officer corps was depleted, 
and Iran struggled to reorganize its field forces. The IRGC 
emerged in early 1979 as a force of about 10,000 men dedi- 
cated to preventing a counterrevolutionary coup by elements 
loyal to the deposed shah, especially within the military. After 
receiving official status in May 1979, the force was used to sup- 
press the growing influence of largely leftist and ethnic armed 
groups within Iran, such as the Fedayan-e Khalq (People's War- 
riors), the Mojahedin-e Khalq (People's Fighters), Peykar, 
Komela, and a Kurdish group, the Peshmerga. The IRGC sub- 
sequently assumed an important military role in the Iran-Iraq 
War. 

As a parallel military and defense force, the IRGC required 
an independent general staff and related military administra- 
tive personnel. Years of trial and error transformed the IRGC 



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into a force rivaling the Iranian army, although both forces the- 
oretically were under one defense ministry. Unlike the mem- 
bers of the regular army, the rank and file of the IRGC initially 
were recruited among Khomeini supporters. Those individuals 
then received special compensation to extend their service 
after the Revolution. 

Gradually, the IRGC evolved into a versatile military force 
entrusted with preserving the accomplishments of the Revolu- 
tion through an expanding range of activities. (The regular 
army, by contrast, retained the primary function of safeguard- 
ing Iran's territorial integrity and political independence, as 
prescribed by the constitution.) Under the Ministry of the 
Islamic Revolutionary Guard Corps, which existed from 1982 
to 1989, the IRGC became the leading institution for weapon 
system procurement in Iran. In the early 2000s, most weapon 
system purchases continue to fall under IRGC jurisdiction, 
rather than that of the regular military. Since the 1980s, the 
IRGC has played a role in military training and exercises and in 
nonmilitary activities such as the installation of gas pipelines in 
regions where no private-sector contractor is willing to work. 
An intelligence branch of the IRGC cooperates with the gov- 
ernment's official security agency, the Ministry of Information 
and Security (MOIS; see Internal Security, this ch.). The 
IRGC's training in land and naval asymmetrical warfare made it 
a valuable asset as Iran incorporated that type of combat more 
fully into its military doctrine in the early 2000s. 

The IRGC had an estimated 125,000 active personnel in 
2007. The Qods Corps is a shadowy intelligence and military 
organization of the IRGC. Directly responsible to the Leader, 
Qods is suspected of being active in Iraq, together with IRGC 
and MOIS forces, since the U.S. occupation of that country in 
2003, and it is suspected of having a role in several major ter- 
rorist attacks against Western targets in the 1990s. Qods agents 
have been reported in the Middle East, South and Central Asia, 
North Africa, and Europe. 

The Basij 

During the war with Iraq, the Basij emerged as a volunteer 
force organized and staffed by civilians to provide support to 
the IRGC and the regular military. Originally formed in late 
1979 in response to Khomeini's call for a volunteer militia to 
confront an expected U.S. invasion, the Basij fielded an esti- 
mated 550,000 troops in the Iran-Iraq War and suffered 36,000 



270 



Troops of the Revolutionary Guard Corps in Qasr-e Shirin 
Copyright Lehtikuva/PHOTRI 



fatalities. The force has recruited mainly among young people, 
including many who drop out of high school to join. Young vol- 
unteers receive significant incentives to join the Basij. Senior 
political leaders often have praised the Basij for its contribu- 
tions to various civilian projects such as earthquake relief work. 
The force is available for any situation deemed an emergency 
or a threat to national security. In case of war, the regular 
armed forces would engage the enemy first, followed by the 
IRGC and then the Basij. Among the Basij 's domestic missions 
have been encouraging and enforcing the Islamization of soci- 
ety, nighttime patrolling of urban streets and intersections, and 
policing of areas where young people gather, such as universi- 
ties and the sites of weekend and summer youth activities. 

At the conclusion of the Iran-Iraq War, the government 
faced the need to reintegrate hundreds of thousands of young 
Basij volunteers into Iranian society. One solution was to use 
the Basij for reconstruction work, particularly under Iran's first 
postrevolutionary five-year economic development plan (see 
Glossary) implemented by the Rafsanjani administration. This 
provided Basij members, who were mostly from the lower class, 
with an income and a role serving the Revolution. The second 
solution was to assign the Basij the duty of upholding Islamic 



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norms. In 1992 a law was enacted giving Basij members author- 
ity to arrest alleged perpetrators of felonies and deliver them to 
the police. This function, carried out mainly in major urban 
areas, integrated the Basij into Iran's law enforcement struc- 
ture. However, since the law's inception the authority of the 
Basij has expanded to include monitoring of a wide variety of 
"suspicious" everyday activities of citizens. This monitoring 
function has included arrests of women who fail to observe the 
Islamic dress code and men who consume alcoholic beverages. 

The IRGC, the Basij 's original sponsor, no longer relies on 
the Basij as a military force because of its low training level. 
However, the IRGC has continued to encourage the Basij to 
participate in military groups and maneuvers. In 2007 the Basij 
had about 300,000 personnel, including 40,000 active person- 
nel; they were authorized to carry small arms only. According 
to estimates, this force, mainly composed of youths, could 
expand to as many as 1 million members in the event of a 
national emergency. 

Arms Acquisition 

In the early 2000s, most of Iran's conventional military 
equipment was outmoded or in poor condition. The regular 
upgrades that occurred during the reign of the shah no longer 
were possible after the Revolution, and the Iran-Iraq War 
destroyed an estimated 50 to 60 percent of land force equip- 
ment. Beginning in the 1980s, access to foreign arms supplies 
has been haphazard. As a result, some types of equipment have 
been upgraded while others have been neglected. 

Arms Imports 

Historically, the role of imported materiel in supplying the 
regular armed forces has been broad, vital, and controversial. 
After World War II, the preponderance of U.S.-made weapons 
led to a dependence on the United States for support systems 
and spare parts. Because foreign technical advisers were indis- 
pensable for weapons operations and maintenance, the cessa- 
tion of U.S military cooperation in 1980 was difficult for Iran. 
After the war with Iraq, Iran felt the need to strengthen and 
diversify its military hardware, but it lacked funds for a compre- 
hensive buildup. Because of the cost of the Iran-Iraq War, U.S. 
economic sanctions, fluctuating oil revenues, and unwise eco- 
nomic policies, Iran's military procurement budget at the end 



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of the 1980s was about half its prewar size. Iran was forced to 
depend heavily on low-grade weapons imports. During the 
1980s, Iran was able to circumvent the U.S. embargo somewhat 
through third-party purchases of spare parts for U.S. military 
equipment, as well as additional U.S. missiles. Unverified 
reports alleged that Israel agreed to sell Sidewinder air-to-air 
missiles to Iran, as well as radar equipment, mortar and 
machine gun ammunition, field telephones, M-60 tank 
engines and artillery shells, and spare parts for C-130 transport 
planes. 

In the 1980s and 1990s, other countries directly or indirectly 
supplying weapons to Iran included Syria (which transferred 
some Soviet-made weapons), France, Italy, Libya (which pro- 
vided Scud missiles), Brazil, Algeria, Switzerland, Argentina, 
and the Soviet Union (later, Russia). Most purchases were 
arranged in international arms markets. Despite embargoes, 
some materiel from West European countries reached Iran. 
West European states often wished to keep communication 
channels open with Iran, even during periods of difficult politi- 
cal relations. 

Although Iran's procurement budget increased significantly 
beginning in 2000 as oil prices increased and economic condi- 
tions improved, in 2003 Iran reached an all-time low in expen- 
ditures on imported combat technology (see Gross Domestic 
Product; The Petroleum Industry, ch. 3). Between 1996 and 
1999, Iran signed new arms agreements valued at US$1.7 bil- 
lion, but for the period 2000-3 the total was only US$500 mil- 
lion. Since the early 1990s, the main foreign supplier has been 
Russia, which between 1992 and 2004 signed arms contracts 
with Iran valued at US$7 billion despite pressure from the 
United States to limit such transactions. In November 2005, 
Iran signed a US$1 billion arms purchase agreement with the 
Russian government. 

After 2000 Iran continued to focus its arms imports on 
advanced weapons and missile technology. In the early 2000s, 
China reportedly developed several new types of tactical 
guided missiles, mainly for use on missile patrol boats, specifi- 
cally for sale to Iran. In 2004 Iran began negotiations with 
North Korea for the purchase of the Taepo-Dong 2, whose esti- 
mated range of 4,000 to 6,500 kilometers would make it Iran's 
first intercontinental ballistic missile. A major part of a 2005 
arms agreement with Russia called for the delivery and installa- 
tion of 29 TOR-MI missile defense installations, costing 



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Iran: A Country Study 



US$700 million. The TOR-MI detects low-flying missiles that 
evade detection by conventional radar systems. It also operates 
against fixed-wing and rotary-wing aircraft and aerial drones. 

Domestic Arms Production 

The Iran-Iraq War and the subsequent Western arms 
embargo stimulated the full reorganization and expansion of 
Iran's defense industries. As imports remained at low levels in 
the early 2000s, domestic arms production played an expand- 
ing role in military procurement. 

In late 1981, the revolutionary government placed all of the 
country's military industrial enterprises under the authority of 
the Defense Industries Organization (DIO), which replaced 
the Military Defense Organization as the oversight agency for 
military factories. In 1983, however, the IRGC received author- 
ity to establish its own military plants, ending the DIO's 
monopoly. The following year, IRGC plants began producing a 
variety of arms and military supplies, a function that continued 
in the 2000s. 

Beginning in the 1990s, Iran has manufactured a variety of 
rockets, missiles, and multiple-rocket launchers, some based on 
imported technology such as the Soviet Scud-B rocket, and 
others fully developed by the Iranian arms industry. A mutual 
defense treaty concluded with India in 2003 promised techni- 
cal assistance for Iran's domestic manufacture of aircraft, tanks, 
and artillery. The missile development and manufacturing arm 
of the DIO is the Aerospace Industries Organization (AIO), 
based at Arak, whose 13 large manufacturing plants also pro- 
duce a wide variety of weapons, ordnance, and equipment for 
Iran's military and for export. The AIO is responsible for devel- 
opment of the long-range Shihab-3 missile. Domestically pro- 
duced surface-to-surface missiles reportedly in the arsenal in 
2005 were the Oghab, Shahin, and Nazeat, the last of which was 
developed with Chinese technical assistance. Since 2002 the 
Iran Helicopter Support and Manufacturing Industry has built 
small numbers of the Shabaviz 2075 transport helicopter, the 
Shabaviz 2061 reconnaissance helicopter, and the Shabaviz 
2091 attack helicopter, all based on designs of the U.S. firm 
Bell Helicopter. The Iran Helicopter Support and Manufactur- 
ing Industry also has rebuilt U.S.-made Chinook transport heli- 
copters acquired in the 1970s and 1980s. In 2001 Iran began 
production of the Azarakhsh fighter plane, an upgraded ver- 
sion of the U.S. F-5. Plans called for production of 30 such air- 



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craft in the early 2000s. Iran is believed to have developed a 
substantial submarine manufacturing infrastructure, the first 
product of which was the Oadir minisubmarine in 2005. In 
2006 two such vessels were known to exist. 

Missiles 

Beginning in the 1990s, Iran's leaders have cited the expan- 
sion of missile capability, based on a combination of domestic 
and foreign technology, as a high priority of national security. 
Iran's desire to acquire missile capability does not derive from 
a perceived threat from Iraq, but rather from Israel, a regional 
power that has cited Iran as a threat since 1991. In 2004 Minis- 
ter of Defense and Armed Forces Logistics Ali Shamkhani 
explicitly stated that Israel was the potential target of the Shi- 
hab-3 missile, which Iran could mass-produce, he said, very 
efficiently. Shamkhani also emphasized that his task was not to 
devise offensive military strategies but to develop "defensive 
capabilities." In 2004 and 2005, statements on the purpose of 
the Shihab-3 by other political and military leaders were simi- 
larly ambiguous. 

The domestically manufactured Shihab-3, which became 
fully operational in 2000, can reach Israel. In 2004 Iranian offi- 
cials claimed that the range of the Shihab-3 missile had been 
extended to 2,000 kilometers, a substantial improvement over 
the previous version. The missile's capability to carry chemical, 
biological, or nuclear warheads extends its threat value. In the 
early 2000s, Iran reportedly obtained 20 North Korean liquid- 
fuel engines to power the Shihab-3, although that number of 
engines is inadequate for serial production of the rocket. The 
number of Shihab-3s in Iran's possession is unknown. 

In recent years, with North Korean and Russian assistance 
Iran has started building and developing its own Scud-B and 
Scud-C surface-to-surface missiles, whose respective ranges of 
300 and 500 kilometers enable them to reach any capital city in 
the Persian Gulf. In 2006 an estimated 300 such missiles were 
in Iran's arsenal. Reportedly, in the 1990s China sold Iran large 
quantities of missile guidance devices. Shihab-3 missiles test- 
fired in 2004 are a variation of the North Korean Nodong, 
whose range is about 1,300 kilometers. Reportedly, a Shihab-4 
variant, whose range is estimated at about 2,500 kilometers, was 
at an early production stage in 2006. A Shihab-5 variant would 
have a range of about 3,400 kilometers. 



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Iran: A Country Study 



Internal Security 

During the tumultuous period between the Islamic Revolu- 
tion of 1978-79 and 1989, the statements and actions of Ayatol- 
lah Khomeini were reliable indicators of political 
developments in Iran. In a time of political upheaval and war 
with Iraq, his charismatic guidance set the framework for an 
Islamic republic. The death of Khomeini in 1989 exposed fac- 
tional politics that had been contained by the cryptic and 
authoritative nature of his recommendations. This crisis 
occurred at the same time that economic and social difficulties 
threatened the internal stability of the country. In this context, 
the role of internal security agencies increased. Nominally, the 
Ministry of Information and Security (MOIS) was designated 
the chief intelligence agency of the state. However, in the 1990s 
and early 2000s other, more covert agencies are believed to 
have performed vital intelligence functions to protect the 
regime. 

Intelligence Services 

Especially after the upheavals of the early 1950s, the shah 
was intensely concerned with matters of internal security (see 
Mossadeq and Oil Nationalization, ch. 1). He thus authorized 
the creation of one of the most extensive systems of law 
enforcement in the developing world. The forces of the Gen- 
darmerie (the rural police) and the National Police grew in 
size and responsibility. In addition, the secret police organiza- 
tion, SAVAK (in full, Sazman-e Ettelaat va Amniyat-e Keshvar; 
Organization for Intelligence and National Security), gained 
notoriety for its excessive zeal in maintaining internal security. 
But, as in the case of the regular armed forces, the shah's man- 
agement style virtually eliminated coordination among these 
agencies. A favorite approach was to shuffle army personnel 
back and forth between their ordinary duties and temporary 
positions in internal security agencies, in order to minimize the 
possibility of an organized coup against the throne. Cultivating 
an image of mystery and fear, the Iranian law enforcement 
agencies were perceived as powerful tools of the shah's abso- 
lute power — a perception that fostered deep resentment 
among Iranians. 

Formed under the guidance of U.S. and Israeli intelligence 
officers in 1957, SAVAK developed into an effective secret 
agency whose goal was to sustain the government of Iran as a 



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National Security 



monarchy. At its height, SAVAK was a full-scale intelligence 
agency with more than 15,000 full-time personnel and thou- 
sands of part-time informants. SAVAK was attached to the 
Office of the Prime Minister, and its director assumed the title 
of deputy to the prime minister for national security affairs. 
Although SAVAK was officially a civilian agency, many of its 
officers served simultaneously in the armed forces. 

After years of underground operation against opposition 
groups, SAVAK was a primary target for reprisals when those 
groups came to power in 1979. Khomeini officially dissolved 
the organization that year. Some 61 SAVAK officials were 
among 248 military personnel executed between February and 
September 1979. 

To make intelligence gathering more publicly responsible, 
the new regime replaced SAVAK with the Ministry of Informa- 
tion and Security (MOIS) . The ministry's primary role in for- 
eign policy has been to support like-minded religious groups 
abroad and to suppress Iranian dissidents. Constitutionally, the 
MOIS has the authority to gather information and to act 
against perceived conspiracies against the Islamic Republic. 
Although open information on the MOIS is limited, the 
defense of the regime from internal threats is a primary func- 
tion. After the election of Mohammad Khatami as president in 
1997 increased the power of reformist factions, the MOIS was 
steadily purged of hard-liners. Against this trend, conservatives 
applied constant pressure to strengthen the security 7 organiza- 
tion. Although the publicly acknowledged security establish- 
ment always has been the MOIS, since 1997 an undefined 
security force, often referred to as "officers in civilian clothes" 
or "unofficial Chilian forces," has existed parallel to the official 
agency. Members of this force intervene to suppress domestic 
disturbances such as demonstrations and strikes and to serve 
generally as an instrument for preventing political dissent and 
civil unrest. 

Law Enforcement 

In the years following the Revolution, the two national 
police forces, called the Gendarmerie and the National Police, 
were under operational control of the Joint Staff of the armed 
forces. Joint Staff members also were empowered to integrate 
regular and paramilitary forces into operational planning. 
Beginning in 1987, the two police forces gradually lost the 
national defense role that they had played in the early 1980s. In 



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Iran: A Country Study 

1991 the Gendarmerie and the National Police were combined 
to form the Law Enforcement Forces (Niruha-ye Entezami-ye 
Jomhuri-ye Islami), which since 1991 have fallen under the 
authority of the Ministry of Interior and now also are known as 
the Islamic Republic of Iran Police (IRIP). Smaller rural units 
of the IRIP correspond in function to the former Gendarme- 
rie, whose duties were mainly outside urban areas. The officials 
comprising the IRIP are appointed by the Leader, and during 
the administrations of President Khatami the IRIP acted auton- 
omously on some occasions. Following the deaths of demon- 
strating students in 1999, Sayyid Ali Khamenei (Leader, 1989-) 
appointed former air force commander Mohammad Qalibaf 
chief of the IRIP. Qalibaf remained in that position until he 
resigned in 2005 to be a candidate in the presidential election. 
Although consolidation of law enforcement and internal secu- 
rity agencies in the IRIP reduced bureaucratic red tape and fos- 
tered interagency cooperation, the final decision-making 
power of the Leader sometimes has hindered effective law 
enforcement because Khamenei lacks expertise in domestic 
security policy. Including border patrol units and marine 
police, the IRIP had about 40,000 personnel in 2005. In 2006 
Iran announced plans to restructure and decentralize the IRIP 
in order to improve operational efficiency. 

The Police-110 rapid-response unit, established under the 
IRIP in 2000, is responsible for maintaining social order and 
responding to emergencies in urban areas. The unit frequently 
has raided social gatherings deemed threatening to domestic 
security or in violation of Islamic law. 

The Military's Relations with Society 

The 1953 military coup against Mohammad Mossadeq, and 
the close relationship of the military with the shah, instilled in 
Iranians an abhorrence of military control of political policy. 
Consequently, the defense establishment adopted a policy of 
silence on political issues. This stance remained unchanged 
after the Revolution, with popular support. Like previous 
regimes, the administration of President Mahmoud Ahmadine- 
jad, who was elected in 2005, has made a practice of excluding 
the military from day-to-day politics. 

Despite the tradition of noninvolvement, beginning in the 
1990s the IRGC, the Basij, and the regular military began 
efforts to redefine their respective relationships with Iranian 
society. The regular military has continuously presented itself 



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National Security 



as above factional politics as it provided manpower and techni- 
cal assistance in civilian projects, capitalizing particularly on 
the remediation of damage incurred during the Iran-Iraq War. 
In contrast, as the proclaimed defenders of Islamic ideology, 
the IRGC and the Basij have felt compelled and entitled to 
engage in the political arena. For example, the latter organiza- 
tion took the position that President Khatami's reform propos- 
als were challenges to the loyal supporters of the Islamic 
Republic and Khamenei. 

By the early 2000s, the ideology that motivated the establish- 
ment of the IRGC had faded, decreasing the authority of the 
organization and the concept that the ideals of the Revolution 
should be protected by such an activist organization. However, 
beginning with the parliamentary elections of 2004, and espe- 
cially since the election of former IRGC officer Ahmadinejad as 
president in 2005, there has been an attempt to increase the 
IRGC's role in internal and external policy making. Many 
former IRGC commanders gained seats in parliament in 2004, 
and under Ahmadinejad the IRGC has substantially increased 
its influence in the Supreme National Security Council 
(SNSC), the agency that coordinates defense and national 
security policies. 

Defense Economics 

Under the Islamic Republic, the armed forces budget has 
been prepared by the Ministry of Defense and Armed Forces 
Logistics in consultation with the Supreme Defense Council 
(SDC). The president, who also is a member of the SDC, sub- 
mits the completed package to the Majlis for debate, approval, 
and appropriation. The ability of the Islamic Republic to com- 
mit resources to military modernization and enhancement is 
contingent on the success of the overall Iranian economy. The 
intrinsic problems of Iran's economy, however, are extremely 
difficult to rectify and were not ameliorated in the early 2000s 
by increased income from Iran's most valuable export, oil (see 
The Economy after the Islamic Revolution, 1979-, ch. 3). Iran's 
defense budget for 2006 was estimated at US$6.6 billion, up sig- 
nificantly from the 2004 level of US$5.6 billion. 

During the reign of the last shah, high military expenditures 
caused severe popular discontent. Income from the oil boom 
of 1973-74 was disproportionately invested in military procure- 
ment at the expense of industry, agriculture, and education. 
Particularly in the rural areas, the civilian population disap- 



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Iran: A Country Study 

proved of the privileged status granted to the military establish- 
ment. Despite constructive civilian activities by the armed 
forces (especially in education), Iranian society in general 
never shared the shah's commitment to a buildup that drained 
the treasury. 

The Revolution failed to change this pattern, except for can- 
cellation of arms procurement commitments in the first year of 
the new regime. At that time, the government abandoned 
many military projects because they involved contracts with 
U.S. corporations and because the Khomeini regime identified 
the government's first priority as satisfying the needs of the 
masses. 

This trend was rapidly reversed, however, with the revolu- 
tionary government's first war budget in 1981. By 1987 all 
defense expenditures for the year, including those of the IRGC 
and Basij and payments to the families of war casualties, totaled 
as much as US$100 billion. Expenditures dropped sharply to 
US$6.8 billion the year after the cease-fire. However, beginning 
in 1989 Iran again increased procurement of arms, largely 
from the former Soviet Union, as well as domestic production 
of strategic missiles. Within the context of new external pres- 
sures in the Persian Gulf region, this policy reflects a realign- 
ment of priorities from addressing fundamental economic ills 
to responding to security pressures related to the Persian Gulf 
region. Beginning in 2003, the presence of U.S. forces both to 
the west in Iraq and to the east in Afghanistan has magnified 
the importance of military funding decisions. Because of 
changes in how military spending is categorized, statistics for 
the early 2000s are speculative. For instance, it is likely that any 
significant expenditures on Iran's nuclear arms program would 
have been concealed under energy production expenses. 

Military Doctrine 

The fundamental principles of Iran's military doctrine were 
laid out in the regulations codified for the armed forces in 
1992, under the title "Iran: Complete Regulations of the 
Islamic Republic of Iran Armed Forces." Because Iran's armed 
forces and equipment were exhausted by the war with Iraq and 
subsequent arms resupply was severely limited by an interna- 
tional embargo and by Iran's poor economic position, the 1992 
doctrine depended heavily on a deep supply of manpower, the 
strategic advantages provided by the nation's geography, and 
the patriotic ideology inherited from Ayatollah Khomeini. The 



280 



National Security 



primary goals of the doctrine were defensive: to protect the ter- 
ritory of Iran and the practice of Islam on that territory. 
Increasingly in the 1990s and early 2000s, Iran's long-term his- 
torical effort to preserve influence in its region was focused on 
ending what it considered the most urgent threat to that influ- 
ence: the U.S. presence in the Persian Gulf region. In the early 
2000s, the doctrine still relied on manpower, territory, and 
ideological fervor, and the fundamental goals remained the 
same. However, by 2000 the offensive and defensive phases of 
the doctrine had been refined by external events and by Iran's 
improved financial and technological resources. 

The Legacy of the Iran-Iraq War 

In the aftermath of the war with Iraq, changes in Iran's 
regional, political, and geo-strategic situation required adjust- 
ments of military strategy and defense doctrine for which the 
revolutionary government was unprepared. However, the Iran- 
Iraq War had the positive result of highlighting grave military 
shortcomings. The war proved to the government that without 
a system of alliances Iran needed more aggressive "defensive" 
weapons, or some type of WMD, that could deter a ruthless 
enemy such as Iraq's president Saddam Hussein. During the 
war, Iraq had used its missile capability to hit Tehran and other 
targets, while Iran could hardly respond. In the last stages of 
the war, Iraq also used chemical weapons to inflict severe casu- 
alties on Iranian troops and civilians. 

The war experience enabled Iran to identify two military 
prerequisites: access to high technology to enhance military 
capacity and military self-reliance. During the war, the lack of 
replacements for U.S. -supplied aircraft, coupled with Iraq's 
missile attacks, further motivated a shift of emphasis from air- 
craft to missiles. 

After the Iran-Iraq War, Iran's security policy generally 
shifted from revolutionary adventurism to a more conservative, 
less confrontational approach. However, this policy faced a new 
strategic environment after the U.S. military presence in the 
Persian Gulf began to expand in the early 1990s. The conflict 
with the United Arab Emirates over the Persian Gulf islands of 
Abu Musa and the Tunbs, the steady buildup of Iran's capacity 
to threaten tanker traffic, Iran's development of long-range 
ballistic missiles, and allegations of an active WMD program in 
Iran alienated the Persian Gulf states and the West. Further- 
more, after the Persian Gulf War of 1991, Iran confronted a 



281 



Iran: A Country Study 



strong coalition dominated by the United States and continued 
exclusion from the Gulf Cooperation Council, the regional 
security organization that included all the other Persian Gulf 
states except Iraq when it was founded in 1981. 

Contemporary Security Policy 

The military doctrine that Iran has chosen in the postwar 
years includes a narrow range of options that focus mainly on 
deterrence. The emphasis on self-reliance has placed a higher 
priority on domestic arms production and on a small number 
of foreign military supply relationships. The quest for interna- 
tional military prestige through conventional and (potential) 
nuclear missile capability has led to regional and international 
isolation that contradicts the doctrinal goal of improving rela- 
tions and security within the Persian Gulf region. 

Until the Persian Gulf War, most threats to Iran involved 
regional territorial disputes or conflicts with neighboring 
states. The arrival of U.S. troops in the region in 1991 created a 
new strategic situation in which Iran felt insecure. Although 
U.S. troops withdrew from Iraq later that year, during the 1990s 
the direct and indirect influence of the United States in the 
region combined with Israel's maturing missile programs to 
exacerbate Iran's insecurity. To the west was the still-hostile 
Iraqi regime of Saddam Hussein, and, in the second half of the 
decade, to the east was the hostile, fundamentalist regime of 
the Taliban in Afghanistan. Although Iran moderated its public 
revolutionary stance during this period, the doctrine of pro- 
tecting Islam came to involve supporting such Islamic organiza- 
tions as the Palestinian Hamas and the Lebanese Hizballah. 
However, links with these groups had the result of further iso- 
lating Iran. At the end of the 1990s, the Iranian government 
shifted its doctrine to emphasize joint military operations with 
neighboring countries, with the goal of reducing U.S. influ- 
ence in the region. This approach met with considerable skep- 
ticism among adjacent states, and international events soon 
overtook Iran's efforts in that direction. 

The terrorist attack on the United States of September 11, 
2001, had a strong impact on Iran's military thinking. After 
September 11, the United States, which Iran continued to per- 
ceive as its principal enemy, received an outpouring of interna- 
tional sympathy, during which it established a military presence 
in Afghanistan. Against a background of deep internal political 
divisions, Iran's sense of encirclement intensified. The U.S. 



282 



Severe damage inflicted on the port of Khorramshahr 
by Iraqi forces in October 1980 
Copyright Lehtikuva/PHOTRI 

invasion of Iraq in 2003 exacerbated Iranian insecurities. Iran 
responded with increased claims about a U.S. psychological 
war against the revolutionary government and warnings that it 
would retaliate for hostile military acts. 

In 2001 Iran had taken a conciliatory approach toward the 
war in Afghanistan led by the United States, offering limited 
assistance to U.S. and North Atlantic Treaty Organization 
(NATO) troops. On the issue of the threatened U.S. invasion 
of Iraq, however, Iranian policy makers believed that national 
security was at stake and a clear position was needed. To ensure 
international control of Iraq's ostensible WMD arsenal, Iran 
advocated a solution involving the United Nations rather than 
military action. It also opposed a unilateral attack by the 
United States because such an action might create a precedent 
for attacking Iran itself. The Iranian government took the posi- 
tion that Iraqi political boundaries should remain intact and 
that the people should choose their own government. Factors 
in this position were Iran's fears that a potential Kurdish state 
in northern Iraq would arouse internal instability among Iran's 
Kurds and that a pro-U.S. government in Iraq would encourage 
antiregime sentiment in Iran (see Other Indo-Iranian-Speak- 
ing Groups, ch. 2). 



283 



Iran: A Country Study 

Realizing that a U.S. invasion of Iraq might be unavoidable, 
Iran adopted a stance of active neutrality. Under this policy, 
which temporarily strengthened Iran's role regionally and 
internationally, the Iranian government first used diplomatic 
means to attempt to circumvent the invasion, then rejected the 
use of force against the invasion once it materialized. Because 
of the unexpected difficulties experienced by the U.S. occupa- 
tion, Iran continued to benefit from that complicated situation 
in subsequent years. 

Because of ongoing concerns about a potential preemptive 
military strike by Israel on its nuclear facilities, Iran accelerated 
development of its defensive capabilities, despite uncertainties 
about the range, targeting, and effectiveness of missiles such as 
the Shihab-3. The Iranian government made unsubstantiated 
claims about the potential of the Shihab-3 to discourage attack 
and to otherwise improve Iran's regional bargaining position. 
Both the exaggerated claims about its ballistic missiles and the 
renewal of uranium enrichment had the goal of bolstering 
Iran's geopolitical stature by calling attention to its military 
potential. The advancement of the nuclear program appeared 
to transcend party ideology within Iran, even as other aspects 
of military doctrine became subject to heated debate. 

In the wake of the 2003 U.S. invasion of Iraq, Iran's military 
doctrine included three basic objectives: to foster long-term 
recovery from the Iran-Iraq War by enhancing the stability of 
the region; to defend Iranian territory and interests against any 
form of external intrusion or attack; and to safeguard Islamic 
values and the nation's right to live in freedom (as defined by 
Islamic laws) "without resorting to military operation." Begin- 
ning in 2003, increasing alarm about a possible U.S. invasion 
led to expansion of Iran's capacity to fight an "asymmetrical 
war," in which an invading force would be absorbed into Iran 
and then subjected to guerrilla warfare, supplemented by 
attacks against the enemy's interests overseas. The basic ele- 
ments of such irregular warfare would be surprise, speed, and 
security. Presumably to advance its irregular-warfare capability, 
Iran started to increase recruiting of new Basij personnel in 
2004 and incorporated irregular operations into the training of 
regular military units. In any case, the ground forces' out- 
moded armor and artillery support, and their heavy depen- 
dence on mobilization of IRGC forces, severely limited Iran's 
potential to fight a conventional land war. 



284 



National Security 



The naval phase of Iran's military doctrine emphasizes utili- 
zation of the geographical configuration of the Persian Gulf in 
asymmetrical warfare. Iran's limited naval resources are to be 
used for small-scale attacks on military and oil-related targets 
and blockades of oil shipping in the gulf. Small attack boats, 
minisubmarines, and mines are key elements in this strategy. 
The air phase of the doctrine has two main elements: ballistic 
missiles and air defense. The missile force is the main element 
of the air doctrine. Its value is to be enhanced by the intimida- 
tion effect of rhetoric hinting at weapons of mass destruction, 
increased range, and possible targeting of Israel or the capitals 
of Persian Gulf states. Air defenses have been strengthened 
only minimally since they were found wanting in the Iran-Iraq 
War. Iran has sought to maximize its limited air-defense forces 
by strategic location, hardening, and concealment. 

Nuclear Issues 

Iran's official position is that it has no program for the devel- 
opment of nuclear weapons and never would use such weap- 
ons. However, certain aspects of its civilian nuclear power 
program, especially its development of facilities for the conver- 
sion of uranium to nuclear fuel, were not disclosed to the Inter- 
national Atomic Energy Agency (IAEA) until 2002, long after 
they had been constructed and become operational. This lack 
of disclosure aroused suspicion in the United States and mem- 
ber countries of the European Union, as well as elsewhere, that 
Iran was using the development of nuclear reactors to generate 
electric power as a cover for the clandestine development of 
nuclear weapons. Iran denied that this was the case, however 
(see Relations with Europe; The United States and Iran, ch. 4). 
As of late 2007, no documentary evidence had confirmed that 
Iran's military doctrine includes a scenario for the use of 
nuclear weapons. However, if Iran had a nuclear weapons pro- 
gram, only a very limited number of political and military lead- 
ers would know of its existence. 

Before the Revolution, the shah's government contracted 
with the German corporation Siemens to build a nuclear 
power plant at Bushehr on the Persian Gulf (see fig. 8). When 
the Revolution halted the project, 85 percent of the first reac- 
tor was complete, but it sustained serious damage in the Iran- 
Iraq War. When the Islamic Republic attempted to resume 
work in the late 1980s, Siemens declined to participate, and 
Iran turned to Russia to complete the plant. The agreement 



285 



Iran: A Country Study 



reached between the Iranian and Russian governments in 
1995, worth an estimated US$800 million, was attractive to Rus- 
sia because it established a nuclear market in the Middle East. 
The station was to include a 1,000-megawatt light water reactor, 
and Russia was to provide 2,000 tons of uranium fuel. Comple- 
tion of the first reactor, originally scheduled for 1999, was 
delayed several times, causing friction between Iran and Russia. 
A 2005 addendum to the agreement provided for Russia to 
train several hundred Iranians to run the plant. The delay of 
scheduled fuel deliveries from Russia and late payments by Iran 
further set back the opening of Bushehr, until at least 2008. 
Meanwhile, Iran announced plans to build a large number of 
additional nuclear power plants. 

International Reactions to Iran's Nuclear Program 

As early as the 1990s, a lack of transparency regarding 
nuclear activity was a major factor in Iran's international isola- 
tion. In October 2003, Iran acknowledged that it had enriched 
small quantities of uranium using imported centrifuge compo- 
nents and had conducted plutonium separation experiments 
without declaring these activities to the IAEA. Iran never has 
agreed that it seriously violated its obligations under the 
Nuclear Non-Proliferation Treaty (NPT) , to which it is a signa- 
tory, and it has continuously asserted that its nuclear program 
is permissible under the treaty because it is intended for pro- 
ducing energy. Despite ongoing inspections, the IAEA was not 
able to resolve all questions about Iran's compliance. Mean- 
while, Iranian conservatives were advocating withdrawal from 
the NPT; former president Mohammad Khatami resisted such 
pressure, but conservative President Mahmoud Ahmadinejad, 
who succeeded Khatami in 2005, displayed a more ambivalent 
attitude. In 2005 and 2006, Iran threatened to withdraw if its 
right to nuclear technology were not recognized. 

In 2005 the failure of Iranian officials and those of the 
United Kingdom, France, and Germany to reach a mutual 
agreement on the nuclear issue created an international 
impression of an ongoing cover-up. Soon after Ahmadinejad 
assumed office in August 2005, he ended Iran's unilateral com- 
mitment to cease uranium enrichment activities at the Esfahan 
nuclear conversion plant; a renewal of that activity was 
announced in February 2006. Iran justified construction of 
nuclear facilities by citing a need to process domestically 
extracted uranium for use in the 30 nuclear power plants that 



286 



National Security 



nominally were in the planning stage. The decision to build 
those plants enjoyed national support and was approved by 
both reformist and conservative factions within the regime. 

The secret nature of the project to give Iran nuclear technol- 
ogy, the limitations on available technology, fear of a U.S. or 
Israeli military response, and the U.S. military presence in the 
region combined to make rapid completion of the Bushehr 
nuclear project a key goal. Project completion also was impor- 
tant because the Bushehr reactor had become a symbol of 
national pride. However, the project was slowed by Russia's 
concerns about jeopardizing its relations with the West. 

Nuclear Facilities 

International concerns have focused not on the Bushehr site 
but on several other nuclear facilities, whose existence Iran 
confirmed only in 2002, after it was revealed that Pakistan's 
leading nuclear scientist, A. Q. Khan, had provided Iran with 
crucial information on making nuclear weapons. Iran disclosed 
its previously undocumented facilities in a report to the IAEA 
in 2002, then agreed to open the sites for IAEA inspection in 
2003 and 2004. According to the IAEA, several of these facili- 
ties were involved, or could be involved, in the nuclear fuel 
cycle, thus requiring IAEA monitoring to ensure that their 
products are not diverted for use in the manufacture of weap- 
ons-grade fuel. Concerns about such diversion were not allayed 
when the IAEA discovered in 2005 that Iran had partial docu- 
mentation for preparation of the explosive core of an atomic 
bomb. 

It is known that Esfahan, at the center of the Iran nuclear 
controversy, has reactors designated for university research and 
the burning of highly enriched uranium, as well as a Chinese- 
made uranium hexafluoride conversion facility. (Uranium 
hexafluoride is a key compound in uranium enrichment both 
for energy and weapons production.) The Esfahan reactors 
serve the Nuclear Technology Research Center, Iran's largest 
nuclear research facility. Besides the threat posed by the con- 
version facility, Esfahan attracted attention because its scientists 
may have requested military-grade plutonium from China in 
the 1990s and because a portion of the nuclear facility is 
believed to be concealed underground, beyond observation by 
the IAEA. 

Moallem Kaleyah, the primary fissile material production 
center in Iran, has been under intense international scrutiny 



287 



Iran: A Country Study 

and heavily guarded by the IAEA in 2006-7. Previously, the cen- 
ter, strategically located in a mountainous region northwest of 
Tehran, had been suspected as a probable facility for the devel- 
opment of nuclear weapons. 

In 2005 a heavy water manufacturing facility was in the last 
stages of construction near Arak, southwest of Tehran. The 
heavy water could supply a reactor manufacturing bomb-grade 
plutonium. Although existence of the Arak facility per se was 
not a violation of international rules on nonproliferation, its 
potential role prompted an international call for construction 
stoppage after the site was discovered in 2002. 



* * * 



The Military Balance, published annually by the International 
Institute for Strategic Studies, and similar publications such as 
the yearbook of the Stockholm International Peace Research 
Institute (SIPRI), remain the best sources for recent data on 
the size, budget, and equipment of the armed forces of Iran. 
Other sources provide information on aspects of complex 
national security issues. Iran's Security Policy in the Post-Revolution- 
ary Era, by Daniel Byman, Shahram Chubin, Anoushiravan 
Ehteshami, and Jerrold Green, is of great value, as are Anthony 
Cordesman's Iran's Military Forces in Transition and Iran's Evolv- 
ing Military Forces. Three recent works of particular value are 
Iran: Time for a New Approach, a task force report of the Council 
on Foreign Relations by Zbigniew Brzezinski, Robert Gates, 
and Suzanne Maloney; a journal article by Steven R. Ward, 
"The Continuing Evolution of Iran's Military Doctrine," which 
provides an extensive discussion of the motivations and condi- 
tions that shaped military doctrine in the early 2000s; and 
Mehdi Moslem's Factional Politics in Post-Khomeini Iran. 
Although somewhat outdated, Wilfried Buchta's Who Rules 
Iran? The Structure of Power in the Islamic Republic remains a 
unique work on the anatomy of political power in Iran. Ken- 
neth M. Pollack's study of U.S.-Iranian relations, The Persian 
Puzzle: The Conflict Between Iran and America, also is of interest. 

In regard to Iran's military industry and weapons technology 
and other security-related matters, the analysis and data pro- 
vided by the Global Security Web site and its online library on 
Iran are most helpful for current conditions and updates. Simi- 



288 



National Security 



lar information is provided by the on-line database of the Insti- 
tute for Science and International Security. 

In the absence of daily access to Iranian newspapers and 
journals, one should consider sources in Persian (Farsi), 
including the Islamic Republic News Agency and other Iranian 
journals and newspapers available on the Internet. Most, if not 
all, Persian sources available on the Internet are free and do 
not require a subscription, although in many cases archive 
availability is limited. (For further information and complete 
citations, see Bibliography.) 



289 



Appendix 



Table 

1 Metric Conversion Coefficients and Factors 

2 Population of the Eight Largest Cities, Preliminary Census 

Data, 2006 

3 Population of Principal Cities, 1996 Census 

4 Ethnic and Linguistic Groups, 1996 

5 Non-Muslim Religious Minorities, 2005 

6 Employment by Economic Sector, Selected Years, 1956- 

2004 

7 Gross Domestic Product by Sector, Selected Years, 1960- 

2006 

8 Destinations of Crude Oil Exports Before and After the 

Revolution 

9 Production of Major Crops, 2001-4 

10 Main Commercial Partners, 2002-5 

11 Composition of Nonoil Exports, Selected Years, 1963-2003 

12 Armed Forces Personnel by Service, Selected Years, 1979- 

2007 

13 Selected Weapons of the Armed Forces, 2005 



291 



Appendix 



Table 1. Metric Conversion Coefficients and Factors 



When you know 


Multiply by 


To find 


Millimeters 


0.04 


inches 




0.39 


inches 


Meters 


3.3 


feet 




0.62 


miles 


Hectares 


2.47 


acres 




0.39 


square miles 


Cubic meters 


35.3 


cubic feet 


Liters 


0.26 


gallons 


Kilograms 


2.2 


pounds 


Metric tons 


0.98 


long tons 




1.1 


short tons 




2,204 


pounds 


Degrees Celsius (Centigrade) 


1.8 


degrees Fahrenheit 




and add 32 





Table 2. Population of the Eight Largest Cities, 
Preliminary Census Data, 2006 



City Population 

Tehran 7,160,094 

Mashhad 2,837,734 

Esfahan 1,573,378 

Tabriz 1,523,085 

Karaj 1,460,961 

Shiraz 1,279,140 

Qom 1,046,961 

Ahvaz 841,145 

Source: Based on information from Iran, Statistical Center of Iran, Preliminary Report 
on Census of Population and Housing for 1385 [2006-7] [in Persian], Tehran, 
December 2006. 



Table 3. Population of Principal Cities, 1 996 Census 

City Population 

Tehran 6,758,845 

Mashhad 1,887,405 

Esfahan 1,266,072 

Tabriz 1,191,000 

Shiraz 1,053,025 

Karaj 940,968 

Ahvaz 804,980 

Qom 777,677 

Kermanshah 673,000 

Orumiyah 435,200 

Zahedan 419,517 



293 



Iran: A Country Study 

Table 3. Population of Principal Cities, 1 996 Census ( Continued ) 



City Population 

Rasht 417,000 

Hamadan 401,000 

Kerman 384,991 

Arak 380,755 

Ardabil 340,386 

Yazd 326,776 

Qazvin 291,117 

Zanjan 286,295 

Sanandaj 277,808 

Bandar-e Abbas 273,578 

Khorramabad 272,815 

Eslamshahr 265,450 

Borujerd 217,804 

Abadan 206,073 

Dezful 202,639 

Kashan 201,372 

Saril 195,882 

Gorgan 188,710 

Najafabad 178,498 

Sabzevar 170,738 

Khomeynishahr 165,888 

Amol 159,000 

Neyshabur 158,847 

Babol 158,300 

Khoi 148,944 

Malayer 144,000 

Bushehr 143,641 

Qaemshahr 143,286 

Sirjan 135,024 

Bojnurd 134,835 

Maragheh 132,217 

Birjand 127,604 

Dam 124,346 

Saqqez 115,394 

Gonbad-e Kavus 111,253 

Saveh 111,245 

Mahabad 107,500 

Varamin 107,233 

Andimeshk 106,925 

Khorramshahr 105,936 

Shahrud 104,765 

Marv Dasht 103,579 

Zabol 100,887 

Shahr-e Kord 100,488 



Source: Based on information from Iran, Statistical Center of Iran, Report on Census of 
Population and Housing for 1375 [1996-97] [in Persian] , Tehran, 1998. 



294 



Appendix 



Table 4. Ethnic and Linguistic Groups, 1 996 

Ethnic Group Language Population 1 ^"'p"^ " ^ 

Persians Persian 38,900,000 64.8 

Azerbaijani Turks Azeri Turkish 9,500,000 15.8 

Kurds Kurdish 4,100,000 6.8 

Lurs 2 Luri 3,410,000 5.7 

Afghans 3 Persian, Pushtu, and 

Turkic dialects 1,408,000 2.3 

Baluchis Baluchi 1,000,000 1.6 

Arabs Arabic 1,000,000 1.6 

Fars Turks 4 Turkic dialects 600,000 1.0 

Turkmens Turkic dialects 500,000 0.8 

Armenians Armenian 300,000 0.5 

Assyrians Assyrian 32,000 0.05 

Other Various 50,000 0.08 

TOTAL 60,000,000 3 100.0 5 

1 Estimated. 

2 Lurs include Bakhtiaris and other Luri-speaking tribal groups as well as non-tribal Lurs. 

3 Afghans include refugees who entered Iran between 1979 and 1989 and their Iran-born children. 

4 Group includes, in order of size. Qashqais. Afshars, Baharlus, Inanlus, Abivardis, and others. 
3 Column does not add to total because of rounding. 

Source: Derived from statistics on primary language reported as being spoken at home 
in Iran, Statistical Center of Iran, Report on Census of Population and Housing for 
1375 [1996-97] [in Persian], Tehran, 1998, passim. 



Table 5. Non-Muslim Religious Minorities, 2005 



Religious Minority 


Language 


Estimated Population 


Armenian Christians 


Armenian 


300,000 


Baha'is 


Persian, Azeri 


250,000 


Assyrian Christians 


Assyrian 


32,000 




Persian 


32,000 


Jews 


Persian, Kurdish 


30,000 


Protestant Christians (Anglicans, 






Evangelicals, Presbvterians) 


Persian, Azeri 


10,000 



Source: Adapted from tables and data in Iran, Statistical Center of Iran, Iran Statistical 
Yearbook 1383 [2004-5], Tehran, 2006. 



Table 6. Employment by Economic Sector, Selected Years, 1956-2004 
(percentage of total workforce) 



Sector/Year 


1956 


1976 


1986 


1996 


2004 




56.3 


34.0 


29.0 


22.8 


21.7 


Total Industry 


20.1 


34.2 


25.3 


30.7 


30.6 




13.8 


19.0 


13.2 


17.5 


16.5 




5.7 


13.5 


11.0 


11.3 


12.3 




23.6 


31.8 


45.7 


46.5 


47.7 


Total Employment, in thousands 


5,908 


8,799 


11,002 


14,572 


22,400 



Source: Based on information from Iran, Statistical Center of Iran, Iran Statistical Year- 
book, Tehran, various years and sections. 



295 



Iran: A Country Study 



Table 7. Gross Domestic Product by Sector, Selected Years, 1 960-2006 
(in percentages) 



Category/Year I960 1978 1990 2004 2006 

Hydrocarbons* 38.3 35.6 16.4 11.8 18.7 

Agriculture 23.5 8.6 19.5 14.1 11.2 

Industry and Mining 7.8 15.5 17.0 24.0 23.0 

Services 30.4 40.3 47.1 50.1 47.1 



*Includes oil and gas extraction, refining, and distribution. 

Sources: Based on information from Iran, Central Bank of Iran, Tehran, various publi- 
cations, http://www.cbi.ir. 



Table 8. Destinations of Crude Oil Exports Before and After the 
Revolution (in percentages) 



Destination/Period 


1971-76 


1998-2003 


Western Europe 


42 


30 


Japan 


33 


22 


Asia and Far East except Japan 


5 


34 


United States 


12 





Africa 


6 


4 




2 


10 


Sources: Based on information from Ebrahim Razzaghi, The Iranian Economy, Tehran, 
1988, and Iran, Central Bank of Iran, Summary of Economic Activities, various 



years, http://www.cbi.ir. 



Table 9. Production of Major Crops, 2001-4 
(in thousands of tons) 



Crop/Year 2001 2002 2003 2004 

Wheat 9,459 12,450 12.900 11,031 

Sugar beets 4,649 6,098 5,300 5,140 

Barley 2,423 3,085 3,100 3,186 

Rice 1,990 2,888 3,300 3,552 

Sugarcane 3,195 3,712 3,650 5,415 

Seed cotton 412 345 330 114 

Pistachios 112 249 310 51 



Source: Based on information from Economist Intelligence Unit, Iran Country Profile 
2006, London, 60. 



296 



Appendix 



Table 10. Main Commercial Partners, 2002-5 



Export Partners, Percentage of Total 



Country/Year 2002 2003 2004 2005 

Japan 19.5 21.3 18.4 16.9 

China 9.7 9.5 9.7 11.2 

Italy 7.3 6.1 6.0 6.2 

South Africa 4.2 3.9 5.8 5.5 



Import Partners, Percentage of Total 
Country/Year 2002 2003 2004 2005 



Germany 16.9 10.8 12.8 13.9 

China 4.7 8.3 7.2 8.3 

Italy 6.2 8.0 7.7 7.1 

United Arab Emirates 9.6 7.8 7.2 6.7 



Sources: Based on information from Europa World Year Book 2005, London, 2220, and 
Economist Intelligence Unit, Iran Country Profile 2006, London, 2006. 

Table 11. Composition of Nonoil Exports, Selected Years, 1963-2003 
(in millions of U.S. dollars) 



Category/Year 1963 1977 1989 2003 

Agriculture 373 264 522 1,414 

Carpets 108 114 345 573 

Industrial Goods 106 153 122 3,268 

TOTAL 634 540 1,044 6,755 



Source: Based on information from Iran, Central Bank of Iran, Summary of Economic 
Activities, various years, http:/ /www.cbi.ir. 



Table 12. Armed Forces Personnel by Service, 
Selected Years, 1979-2007 



Service 1979* 1984 1986 1999 2001 2003 2007 



Active Armed • 

Forces 415,000 555,000 704,000 545,000 513,000 520,000 545,000 

Army 285,000 250,000 305,000 350,000 325,000 325,000 350,000 

Navy 30,000 20,600 14,500 20,600 18,000 18,000 18,000 

Air Force .... 100,000 35,000 35,500 50,000 45,000 52,000 52,000 

IRGC n.a. 250,000 350,000 125,000 125,000 125,000 125,000 

Total Basij n.a. 2,500,000 3,000,000 200,000 200,000 300,000 300,000 

Active Basij n.a. n.a. n.a. 40,000 40,000 40,000 40,000 



*Prerevolutionary figures, 
n.a. — not available. 

Source: Based on information from International Institute for Strategic Studies, The 
Military Balance, London, various years. 



297 



Iran: A Country Study 



Table 13. Selected Weapons of the Armed Forces, 2005 



Service Weapon Number 



Army T-54 and T-55 Main Battle Tank 540 

T-72 Main Battle Tank 480 

Chieftan Mk-3 and Mk-5 Main Battle Tanks 100 

M-47 and M-48 Main Batde Tanks 168 

Zulqifar Main Batde Tank 100 

Scorpion and Towsan Light Tanks 80 

BMP-1 Armored Infantry Fighting Vehicle 210 

BMP-2 Armored Infantry Fighting Vehicle 400 

BTR-50 and -60 Armored Personnel Carriers 300 

M-l 1 3 Armored Personnel Carrier 200 

Boragh Armored Personnel Carrier 140 

M-101A1 Towed 105-mm Gun 130 

D-30 Towed 122-mm Gun 540 

Type 54 Towed 122-mm Gun (Chinese) 100 

M-46 and Type 59 Towed 130-mm Gun 985 

D-20 Towed 152-mm Gun 30 

M-l 1 4 Towed 1 55-mm Gun 70 

GHN-45 Towed 1 55-mm Gun 120 

2S1 Self-Propelled 122-mm Gun 60 

M-l 09 Self-Propelled 155-mm Gun 180 

Navy Kilo Submarine 3 

Alvand (Vosper) Frigate 3 

Bayandor (PF-103) Corvette 2 

Kaman (Combattante) Missile Craft 10 

Hejaz Mine Layer 2 

Air Force F-4D and F-4E Fighter Aircraft 65 

F-5E and F-5F Fighter Aircraft 60 

Su-24 MK Fighter Aircraft 30 

Su-25K Fighter Aircraft 7 

Mirage F-1E Fighter Aircraft 24 

F-14 Fighter Aircraft 25 

F-7M Fighter Aircraft 24 

MiG-29A and MiG-29UB Fighter Aircraft 25 



Source: Based on information from International Institute for Strategic Studies, The 
Military Balance 2004-2005, London, 2005, 124-25. 



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cnn.com/WORLD/meast/9904/23/BC-Iran-US.ap/ 
index.html. 

"Iranian Conservatives Pledge Continued Cooperation with 
UN Nuclear Watchdog." Agence France Presse, February 24, 
2004. http://www.spacewar.com/2004/040224151317.hia- 
nea la.html. 

"Iranian FM Sees Israel as a Threat, Denies Nuke Arms Pro- 
gram." Islamic Republic News Agency, October 4, 2004. 
http://www.globalsecurity.org/wmd/library/news/iran/ 
2004/ iran-041004-irna01.htm. 

"IRGC Commander Warns Zionist Regime Against Targeting 
Iran." Islamic Republic News Agency, August 11, 2004. http:/ 
/www. globalsecurity.org/wmd/library/ news/iran/2004/ 
iran-04081 l-irna04.htm. 

Katzman, Kenneth. Iran: Arms and Technology Acquisitions. Wash- 
ington, DC: Congressional Research Service, 2001. 

Katzman, Kenneth. Iran: Arms and Weapons of Mass Destruction 
Suppliers. Washington, DC: Congressional Research Service, 
2003. 

Kemp, Geoffrey, ed. Iran's Bomb: American and Iranian Perspec- 
tives. Washington, DC: Nixon Center, March 2004. 

Kharrazi, Kamal. "The View from Tehran." Middle East Policy 12, 
no. 1 (Spring 2005). 

Kile, Shannon N., ed. Europe and Iran: Perspectives on Non-prolifer- 
ation. Oxford: Oxford University Press, 2005. 

Mokhtari, Fariborz. "No One Will Scratch My Back: Iranian 
Security Perceptions in Historical Context." The Middle East 
Journal 59, no. 2 (Spring 2005). 

Moslem, Mehdi. Factional Politics in Post-Khomeini Iran. Syracuse: 
Syracuse University Press 2002. 

Pollack, Kenneth M. The Persion Puzzle: The Conflict Between Iran 
and America. New York: Random House, 2004. 

Ramazani, Ruhollah K. "Ideology and Pragmatism in Iran's 
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Roshandel, Jalil. "Iran's Foreign and Security Policies: How the 
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(March 2000). 



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Schake, Kori N., and Judith S. Yaphe. The Strategic Implications of 
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Stockholm International Peace Research Institute. SIPRI Year- 
book 2005: Armaments, Disarmament, and International Security. 
Oxford: Oxford University Press, 2005. 

"Straw Completes Mid-East Mission." BBC News, October 10, 
2002. http://news.bbc.co.Uk/2/hi/uk_politics/2315473.stm. 

Taremi, Kamran. "Beyond the Axis of Evil: Ballistic Missiles in 
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Taremi, Kamran. "Iranian Policy Towards Occupied Iraq." Mid- 
dle East Policy 12, no. 4 (Winter 2005) . 

Traynor, I., and S. Goldenberg. "Fresh Suspicion over Iran's 
Nuclear Aims." Guardian Online, November 20, 2004. http:// 
www.guardian.co.uk/iran/story/0, 12858, 1355587,00. 

United States Arms Control and Disarmament Agency. World 
Military Expenditures and Arms Transfers, 1996. Washington, 
DC, 1997. 

Ward, Steven R. "The Continuing Evolution of Iran's Military 
Doctrine." The Middle East Journals, no. 4 (Autumn 2005). 

(Various issues of Iran Daily (Tehran), http://www.iran- 
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Institute for Strategic Studies, The Military Balance (London) 
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Institute for Science and International Security, http:// 
www.isis-online.org/ ; Iran Virtual Library, http://www.irvl.net; 
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http://www.payvand.com; and Radio Free Europe/Radio Lib- 
erty Iran Report, http://www.rferl.org/reports/iran-report.) 



325 



Glossary 



barrels per day (bpd) — Production of crude oil and petroleum 
products frequently is measured in this unit, which often is 
abbreviated bpd or bd. As a measurement of volume, a bar- 
rel is the equivalent of 42 U.S. gallons. Conversion of barrels 
to tons depends on the density of the specific product in 
question. About 7.3 barrels of average-density crude oil 
weigh one ton, and seven barrels of heavy crude have an 
equivalent weight. Lighter products such as gasoline and 
kerosene average about eight barrels per ton. 

bazaar — Term referring to the area of an urban center where 
merchants and artisans traditionally sold their wares and, 
beginning in the nineteenth century, to the influential class 
of society to which merchants and artisans belong. 

economic development plan(s) — Iran's economic develop- 
ment plans have been of varying lengths and have had vari- 
ous nomenclature. Under Mohammad Reza Shah, five plans 
were completed, and a sixth was in progress at the time of 
the Islamic Revolution of 1978-79. The Islamic Republic has 
had formal five-year economic development plans since 
1990, the fourth of which began in March 2005. The plans 
begin and end in March in accordance with Iran's fiscal year 
(q.v.) and the Iranian calendar year (q.v.). 

faqih — An expert in religious jurisprudence, specifically a Shia 
(q.v.) cleric whose mastery of the Quran, the traditions of 
the Prophet and the Twelve Imams, and the codices of Shia 
Islamic law permit him to render binding interpretations of 
religious laws and regulations. A prominent faqih, chosen by 
a body of senior faqihs, is empowered to rule as the Leader of 
the Revolution in accordance with the concept of velayat-e 
faqih (q.v.) enunciated by Ayatollah Khomeini. 

fiscal year (FY) — Coincides with the Iranian calendar year 
(q.v.), which runs from March 21 through March 20. 

gross domestic product (GDP) — The total value of goods and 
services produced within a country's borders during a fixed 
period, usually one year. Obtained by adding the value con- 
tributed by each sector of the economy in the form of com- 



327 



Iran: A Country Study 

pensation of employees, profits, and depreciation 
(consumption of capital). Subsistence production is 
included and consists of the imputed value of production by 
the farm family for its own use and the imputed rental value 
of owner-occupied dwellings. 

gross national product (GNP) — Gross domestic product (q.v.) 
plus the income received from abroad by residents, less pay- 
ments remitted abroad by nonresidents. 

hejab — Modesty in attire, generally interpreted by the Shia 
clergy to mean that by age 10 females must cover all their 
hair and flesh except for hands and face when in public. In 
the Islamic Republic, hejab became a symbol of the rule of 
Islamic law over society and a source of irritation in some 
social circles. 

hezbollahi(s) — Literally, a follower of the party of God. Hezbolla- 
his, originally followers of a particular religious figure, even- 
tually came to constitute an unofficial political party. 
Although they often acted like vigilantes in breaking up 
meetings of politicians whom they deemed too liberal, they 
were not an irregular military or paramilitary group. 

imam — Among Twelver Shias, the principal meaning is a desig- 
nation of one of the 12 legitimate successors of the Prophet 
Muhammad. Also used by both Shias (q.v.) and Sunnis (q.v.) 
to designate a congregational prayer leader or cleric. 

Iranian calendar year — The Iranian calendar is a solar calendar 
that begins each year at the vernal equinox (usually March 
21). The Iranian calendar begins counting years from 622 
A.D., the year of Muhammad's flight from Mecca to Medina. 
The current Iranian calendar year, which began in March 
2008, is 1387. 

kadkhoda — In rural Iran, a village headman; also used as the 
title for leaders of some tribal clans. 

madrassa — A religious college or seminary that trains students 
in Islamic jurisprudence. 

mahriyeh — A stipulated amount of money and/or property that 
a groom provides his bride according to their marriage con- 
tract. 

Majlis — A term used in two senses: the legislative body of impe- 
rial Iran, which included a senate and an elected lower 
house of representatives, or the lower house alone. After the 



328 



Glossary 



Revolution of 1978-79, the Islamic Republic abolished the 
senate, retaining an elected lower house known as the Majlis. 

maktab — A primary school operated by Shia clergy. 

mojtahed — In Shia religious law, a religious leader who has 
achieved high status by passing through a series of pre- 
scribed stages of education and experience, and thus is wor- 
thy of emulation and entitled to issue rulings and decrees. 

mostazafin — Literally, the disinherited; originally, a religious 
term for the poor, which subsequently was popularized. 

mullah — General term for a member of the Islamic clergy; usu- 
ally refers to a preacher or other low-ranking cleric who has 
not earned the right to interpret religious laws. 

Organization of the Petroleum Exporting Countries (OPEC) — 
An organization encompassing 12 of the world's major oil- 
producing countries: Algeria, Angola, Indonesia, Iran, Iraq, 
Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab 
Emirates, and Venezuela. OPEC coordinates the petroleum 
policies of its members, with the exception of Iraq, whose oil 
production has not been included in OPEC production 
agreements since 1998. OPEC members account for about 
two-thirds of world oil reserves and more than 40 percent of 
world oil production. 

rial — Basic unit of Iranian currency. Between 1984 and 2001, 
Iran had multiple exchange rates, including official and 
unofficial rates. Since 2001 there has been a single exchange 
rate. In late February 2008, the exchange rate was about 
9,400 rials to the U.S. dollar. 

sharia — Islamic canon law. Among Shias (q.v.) the sharia 
includes the Quran and the authenticated sayings of the 
Prophet Muhammad and the Twelve Imams. 

Shatt al Arab — "The Stream of the Arabs," Arvandrud in Per- 
sian, a river about 200 kilometers in length, formed by the 
confluence of the Euphrates and the Tigris at the town of 
Qurnah in southern Iraq. The southern end of the river con- 
stitutes the border between Iraq and Iran. Control of the 
waterway has been a source of friction since at least the sev- 
enteenth century; it was a major cause of the Iran-Iraq War 
of 1980-88. 

Shia(s) — A member of the smaller of the two great divisions of 
Islam. The Shias supported the claims of Ali and his line to 



329 



Iran: A Country Study 



presumptive right to the caliphate and leadership of the 
world Muslim community, and on this issue they split from 
the Sunnis (q.v.) in the first great schism of Islam. Later 
schisms produced further divisions among the Shias. 
special drawing right — A standardized monetary unit used by 
the International Monetary Fund (q.v.) for the transactions 
of several international institutions. It is standardized against 
all currencies using it rather than the home country's cur- 
rency and is drawn from a pool of contributions by member 
countries. 

Sunni(s) — A member of the larger of the two great divisions of 
Islam. The Sunnis, who rejected the claim of Ali's line to 
leadership of the world Muslim community, believe them- 
selves to be the true followers of the sunna, the guide to 
proper behavior that includes the Quran and the words of 
the Prophet Muhammad. 

velayat-e faqih — The guardianship of the religious jurisprudence 
expert. The concept was elaborated by Ayatollah Khomeini 
to justify political rule by the clergy. 

White Revolution — Term used by Mohammad Reza Shah Pahl- 
avi to designate the program of economic and social reforms 
that he initiated in 1963. 



330 



Index 



A-l autoroute, 184 
A-2 autoroute, 184 
Abadan, 100, 163 

Abadgaran. See Islamic Iran Builders Coun- 
cil 

Abbas, 15 
Abbasids, 15-16 
Abraham, 119 
Abu Bakr, 13 

Abu Musa and the Tunbs (island group), 

44, 244, 281 
Abu Muslim, 15 
Abu Said, 17 
Achaemenes, 7 

Achaemenian dynasty, xxxix, 7-10; and 
Babylonian captivity, 131; art and archi- 
tecture, 9-10; commercial policy, 9; high- 
way construction, 9; structure, 9 

acquired immune deficiency syndrome 
(AIDS), 138 

"active calm" strategy, 211, 212 

active neutrality policy, 2003, 284 

Adel, Gholam Ali Haddad, 214 

Aerospace Industries Organization, 274 

Afghani, Jamal ad Din al, 24 

Afghanistan, 247, 248, 250, 282 

Afghans, 21,96 

Afshar tribe, 21,99 

Agajani people, 96 

AghaKhan, 127 

Agricultural Products Insurance Fund, 169 

agriculture, 168-72; crop distribution, 169; 
major products, 169-70; output, 109, 
169; processing of products, 178; 
resources for, 168-69; share of GDP, 
168, 169; state policy, 169-72; subsidies, 
170, 172; trade, 172; workforce, 155 

Ahl-e Haqq, 94, 97, 127 

Ahmad Shah, 27 

Ahmadinejad, Mahmoud: and nuclear issue, 
xlv-xlvi, 286; censorship, 189, 237-38; eco- 
nomic policy, xliv, xlvi, 153; election in 
2005, 215; foreign policy, xlv, 245-46; mili- 
tary policy, 278; relations with Khamenei, 
xlvi; relations with Majlis, xliv; repression of 
labor unions, 156; social policy, xliv, xlv 



Ahvaz, 100, 134, 165, 179 
AIDS. See acquired immune deficiency syn- 
drome 

AIOC. See Anglo-Iranian Oil Company 
Ainjalut, Battle of, 17 
air defense, 285 

air force, 267, 269; bases, 269; creation by 
Reza Shah Pahlavi, 258; destruction, 1941, 
258; equipment, 267, 269; expansion by 
Mohammad Reza Shah Pahlavi, 267; in 
military doctrine, 285; personnel, 267; 
reorganization under Islamic Republic, 
267; role in Revolution of 1978-79, 52 

air pollution, 88, 138 

airports, 188 

air refueling, 269 

air transport, 188 

Akkad,6 

Ala, Hussein, 35 

Alai, Ahmad Mir. See Mir Alai, Ahmad 
Alam, Asadollah, 36 
Alborz Mountains, 85, 87 
Albright, Madeleine, 249, 250 
Alexander the Great, 10 
Algeria, 273 

Algiers Agreement (1975), 44 

Algiers Agreement (1981), 60 

Ali (prophet), 15, 118 

Ali Muhammad, Mirza, 130 

Ali Nur, Mirza Hussein, 130 

Ali Shah, Mohammad, 25 

Allameh (organization), 230 

Al-Mahdi Aluminum Complex, 180 

Al Mamun, 15 

Alptigin, 16 

al Qaeda, 250, 251 

aluminum industry, 179 

Alumut, 16 

Alvand (frigate), 266 

Amadai. See Medes 

Amal (liberation group) , 245 

Amin (Abbasid leader), 15 

Amini, Ali, 36 

Amnesty International, 47 

Amuzegar, Jamshid, 47 

An Najaf, 39, 124 



331 



Iran: A Country Study 



Anglo-Iranian Oil Company (AIOC) (see 
also Anglo-Persian Oil Company), 32, 
160, 161 

Anglo-Persian Agreement of 1919, 27 
Anglo-Persian Oil Company (APOC) (see 

also Anglo-Iranian Oil Company), 30, 

160 

Anglo-Russian Agreement of 1907, 26 
Ansar. See Supporters of the Party of God 
antigovernment plots: of 1980, 60; of 1982, 
65 

Antiochus I, 10 

Anushirvan the Just. S^Chosroes I 
APOC. See Anglo-Persian Oil Company 
appeal, legal right to, 224 
Arab conquest of Iran, 13-14 
Arabia, 13 

Arabic language, xxxix, 99-100 

Arabic script, 97 

Arab-Israeli peace process, 73 

Arab-Israeli War of 1973, 148 

Arabs in Iran, xxxix, 91, 100, 127 

Arak, 128, 163, 274 

Aramaic alphabet and language 9, 11 

Aras River, 98 

Ardabil, 18, 97 

Ardabil Province, 96, 98 

Ardabili, Ayatollah Abdol Karim Musavi. 

See Musavi Ardabili, Ayatollah Abdol 

Karim 
Ardeshir, 11 
Argentina, 273 

armed forces, 258-72; and overthrow of 
shah, 1979, 51-52; chains of command, 

263- 64; combat experience, 264; com- 
mander in chief, 263; direct command 
by Mohammad Reza Shah Pahlavi, 259- 
60; execution of officers, 1979, 53, 234, 
269; expansion by Reza Shah Pahlavi, 27, 
258; funding, 279-80; regular branches, 

264- 69; relations with society, 278-79; 
restructuring under Islamic Republic, 
260-62, 264-65; special branches, 269- 
72; training, 264 

Armenia: conquest by Cyrus II, 7; natural 
gas trade, 166; occupation by Ottomans, 
21; rail connection with, 186; relations 
with Iran, 247 

Armenians in Iran, 101, 128, 129 

armored equipment, 265 

armored personnel carrier (APC), 265 

armored vehicles, 265 



arms embargo on Iran, 272, 273, 274, 280 

arms-for-hostages transaction, 68 

arms imports, 71, 272-74; budget, 272-73, 
279-80; historical background, 272-73; 
policy after 2000, 273-74; sources after 
2000, 273-74 

arms markets, international, 273 

arms production, 274-75 

army, 264-66; equipment, 265-66, 272; 
force size, 264; modernization by the 
Pahlavis, 258-59; reforms under Rafsan- 
jani, 261-62; structure, 264-65 

Army Military Revolutionary Tribunal, 60 

arrests, political, 235, 236 

Arsaces (leader), 10 

Arsacids (Parthians, people and dynasty), 

xxxix, 7, 10 
Artaxerxes I, 9 
artillery equipment, 265-66 
art in Iran, 240 
artisans, 102 

artistic expression, freedom of, 239 
Arvand Rud. See Shatt al Arab 
Arya Mehr, 41 

Arya Mehr Technical University, 41 
xAsadabadi. See Afghani, Jamal ad Din al 
Asaluyeh, 167 

Asia Minor, conquests of, 7, 10 
Asr-eMa (newspaper), 237, 238 
assassinations of 1981, 63-64 
assassins, 16 

Assembly of Experts (constituent assem- 
blv),56 

Assembly of Experts (government body) , 

66, 209,217, 220 
Association of Iranian Writers, 230 
Association of the Seminary Teachers of 

Qom, 65 
Assyrian Church of the East, 101 
Assyrian language, 99, 100 
Assyrians in Iran, 91, 100-101, 128 
asymmeuical warfare, 270, 284, 285 
Ataturk, Kemal, 27 
Australia, 90 

automobile industry, 178 
"axis of evil" speech, 250 
ayatollah, 126 
ayatollah ol ozma, 126 
Azarakhsh (fighter plane) , 274 
Azarbaijan Democratic Party, 31 
Azerbaijan. See Azerbaijan, Republic of 
Azerbaijan, Republic of, 97, 247 



332 



Index 



Azerbaijani language, 97, 247 
Azerbaijanis, 97 
Azeri. See Azerbaijanis 
Azhari, Gholam Reza, 49 



Baathist Party of Iraq, 257 
Babylon, 7, 10 
Babylonia, 9, 10 
Babylonian captivity, 7, 131 
Bactria, 10 
Baghdad, 15, 16, 17 
Baghdad Pact, 35 
Baha'i faith, 49, 97, 129-30 
Baha'u'llah. See Ali Nur, Mirza Hussein 
Bahrain, 20, 42, 243 
bakhshs. See rural districts 
Bakhtaran. See Kermanshah 
Bakhtaran Province. See Kermanshah Prov- 
ince 

Bakhtiar, Shapour, 50, 51, 52, 76 

Bakhtiaris, 91, 95 

balance of payments, 200-201 

Balochistan Province (Pakistan), 95 

Baluchi language, 91, 95 

Baluchis, 95-96, 127 

Bam, 87 

Bandar-e Abbas, 100, 163, 185, 186, 266 
Bandar-e Anzali, 186, 266 
Bandar-e Khomeini, 186, 266 
Bandar-e Mah Shahr, 266 
Bandar-e Torkaman, 185 
Bani Sadr, Abolhasan: presidency of, 57- 
63 

banking sector: policy, 147, 148; restrictions, 

195; role in construction industry, 180; 

structure, 194—95 
Bank Markazi {see also Central Bank of 

Iran), 156, 194-95 
Banking Nationalization Act, 195 
Basij, 269, 270-72, 279 
Basra-Baghdad Highway, 68 
Bayandor (corvette), 266 
bazaar, xliv, 102, 105, 231 
Bazargan, Mehdi, 45, 56, 61, 66; tenure as 

prime minister, 51-54 
Beheshti, Ayatollah Mohammad, 52, 58, 

63 

Bell Helicopter, 274 
birth control, 89 
birthrate, 89 
"Black Friday", 49 



blockade of Iran, 1979-80, 149 
BMP (armored vehicle), 265 
bonyads, 139-40, 192 

Bonyad-e Mostazafin. See Foundation of the 

Disinherited 
book publishing, 239-40 
Boragh, 265 
border police, 278 
Borujerd, 95 
branch courts, 223 
Brazil, 265, 273 

Britain {see also United Kingdom): activi- 
ties in Iran in World War I, 26; division 
of Iran with Russia, 26; EU3 activities, 
xlvi, 242, 289; occupation of Iran, 1941, 
xli, 30, 258; oil policy in Iran, xli, 32-33, 
160; protectorate over Iran, 27; relations 
with Iran, 1980s, 69; relations with Qajar 
Dynasty, 22-24; trade in Persian Gulf, 21; 
treat)' with Iran and Soviet Union, 1942, 
30; withdrawal from Persian Gulf, 42, 
257 

Brzezinski, ZbigniewK, 57 

budget, national, 192-94 

Budget Bureau, 38 

Buenos Aires bombings, 71 

Bus Drivers' Union of Tehran, 156 

Bush, George H.W., 248 

Bush, George W., 250 

Bushehr, 100, 186, 266 

Bushehr nuclear plant, 72, 190, 285-86 

Byzantine Empire, 13 

C-130 transport plane, 273 

C-802 missile, 266 

cabinet, 220 

California, 90 

Cambyses II, 7 

Canada, 90 

capital account, 201 

carpet weaving, 173 

Carter, Jimmy, 47 

Caspian coastal plain, 85, 87, 92 

Caspian Sea: fisheries, 172-73; pollution, 

172-73, 247; ports, 186 
Caspian seal, 88 

Caspian Sea Shipping Company, 186 
caviar, 172 

censorship: of Internet, 189, 239; of news- 
papers, 238; of publishing, 239-40 
CENTO. See Central Treaty Organization 



333 



Iran: A Country Study 



Central Asia, xxxix, 247 

Central Bank of Iran {see also Bank Markazi) , 

62, 156, 194-95 
Central Council of Friday Prayer Leaders, 

219 

Central Intelligence Agency (CIA), 34 

Central Oversight Committee, 228 

Central Plateau, 85, 87, 91 

Central Treaty Organization (CENTO), 
35,42 

Chabahar, 186, 266 

chain of command, military, 263, 264 

chador, 115, 116, 117 

Chahar Mahall va Bakhtiari, 95 

Chaldeans, 101 

Chaldiran, Battle of, 20 

checks and balances, constitutional, 217 

chemical weapons, 281 

Chengdu Aircraft Corporation, 267 

chief of staff of the armed forces and com- 
mander of the Gendarmerie, 261 

China: and sanctions issue, xlvi; arms sales 
to Iran, 68, 265, 273, 274; guerrilla move- 
ments, 45; investment in Iran, xlviii; 
nuclear technology to Iran, 287; petro- 
leum and gas purchases, xlviii, 163; trade 
with Iran, 199, 200 

Chinook helicopter, 274 

Chorasmia, 7 

Chosroes I, 11-12 

Chosroes II, 13 

Christ {see also Jesus), 13 

Christians in Iran, 128-29; representation 
in Majlis, 221 

Churchill, Winston, 31 

cities, largest {see also urbanization), 89 

civic organizations, 233 

civilian-military relations, 278-79 

civil law, 224 

civil liberties {see also human rights), 234- 

37 

civil service code, 28 
class structure, 104-8, 116, 149 
Clerical Court, 224 
clergy-state relations, xl, xlii 
clerical powers, xxxix, xlii, 224-25 
climate, 87 

Clinton, William J., 72, 248 
Coalition for All Iran, 214 
coastal lowlands, 85 

Combatant Clerics Association, 75, 76, 77, 
230, 231 



Conoco oil company, 72 

conservatives: political coalition, xlii, 75-77, 
231-32; strategy against reform, 1997- 
2003, xliv, 208-12; success of, xliv, 210-15; 
views on democracy, xliv 

constitution of 1906, 25, 215-16 

constitution of 1979: amendments of 1989, 
70, 218; and religious minorities, 128, 130, 
131, 132; established, xlii, 56, 216; human 
rights provisions, 233-34; shortcomings, 
217 

constitutional assembly of 1898, 70 
constitutional assembly of 1989, 216 
Constitutional Revolution, 1905-7, xl, 25- 
26 

construction industry, 180 
consumer goods, xlvii, 173, 176-80 
convertibility, currency, 73 
cooperatives in retail trade, 181 
copper industry, 167, 179 
corvettes, 266 

Council for the Discernment of Expedi- 
ency. See Expediency Council 
counties, 226 
criminal law, 224 
Croesus, 7 

Crusade for Reconstruction, 54, 110 
Ctesiphon {see also Mzdain), 11 
Cuba, guerrilla movements, 45 
Cultural Heritage and Tourism Organiza- 
tion, 182 
cuneiform, 92 
current account deficit, 201 
Curzon, Lord, 26 
Cyrus II, 7, 41 

Cyrus the Elder. See Cyrus II 
Cyrus the Great. See Cyrus II 

Dalan, 165 

Dar ol Fonun, 23 

Darayarahush. See Darius I 

d'Arcy, William, 160 

Darius I, 7 

Darius III, 9 

Darius the Great. See Darius I 
Dasht-e Kavir (Salt Desert), 85 
Dasht-e Lut (Desert of Emptiness), 85 
data (legal system), 9 
Davar, Ali Akbar, 28, 29 
death, causes of, 137-38 
death rate, 89 



334 



Index 



debt, foreign. foreign debt 
debt crisis, 1980-82, 149 
debt rescheduling, 74 
debt service, 201 

Defense Industries Organization (DIO), 

274 
Delhi, 21 

Democratic People's Republic of Korea. 

See North Korea 
dentists, 137 

development plans. See economic develop- 
ment plans 
Dez River, 86 
Dhofar rebellion, 42 
dihqans, 11, 13, 14 
Din Shah, Muzaffar ad, 25 
Din Shah, Naser ad, 22-25 
Din, Rashid ad. SeeRashid ad Din 
Din, Safi ad. See Safi ad Din 
DIO. See Defense Industries Organization 
disability benefits, 140 
disaster response, 137 
divorce, 115 

Dowleh, Mirza Hosain Khan Moshir od, 24 

Dowleh, Vosuq ad, 26 

dress standards: changes under Moham- 
mad Khatami, 208; enforcement, 271; 
reform by Reza Shah Pahlavi, 28 

drug abuse, 138 

drug rehabilitation, 138 

dual sovereignty, 224-26 

Dubai, 244 

durable goods, 178 

Dutch, in Persian Gulf, 21 

earthquakes, 87 

East Azarbaijan Province, 96, 127, 247 
Ebadi, Shirin, 213, 235, 237 
EC. See European Community 
Ecbatana, 6 

economic development plans: under Moham- 
mad Reza Shah, 32, 35, 147; under Islamic 
Republic, 73, 150, 151, 169, 179, 180, 192, 
193, 195, 215, 271 
economic growth, xlvii, 148, 156-59 
education, 132-35; enrollment statistics, 
134-35; policy under Islamic Republic, 
134-35; reform under Mohammad Reza 
Shah Pahlavi, 40, 46, 133-34; reform 
under Reza Shah Pahlavi, 28, 133-34; 



role of clerics, 28; under Qajar dynasty, 
132-33 

Egypt: capture by Cambyses II, 7; relations 
with Iran, 72, 244; revolt in, 9; war with 
Israel, 1973, 148 

Eighth Imam (Reza), 124 

Eisenhower, Dwight D., 34 

Elamites, 6-7 

election law, 227-28 

elections: Assembly of Experts, 1990, 75; 
constitutional prescriptions for, 220, 221; 
Guardians Council role in, 209, 214, 222, 
226, 227-28; local council, 1999, 209; local 
council, 2003, 213; municipal, 1968, 40; 
parliamentary, 1960, 36; parliamentary', 
1963, 37; parliamentary, 1980, 58; parlia- 
mentary, 1984, 66; parliamentary, 1992, 
75; parliamentary, 1996, 76; parliamen- 
tary, 2000, 209-10; parliamentary, 2004, 

213- 14; presidential, 1980, 57; presiden- 
tial, 1981, 63; presidential, 1985, 66; presi- 
dential, 1989, 70; presidential, 1997, 208; 
presidential, 2001, 212; presidential, 2005, 

214- 15 

electoral system, 227-29 

electric power, 190-91; and subsidies, 191; 

consumption, 191; output, 190; trade in, 

191 

elementary schools, 133-34 

emigration, post-Revolution, 89-90, 136 

employment distribution, 155-56 

Enqelab-e Islami (newspaper), 61 

environmental conditions: air pollution, 88, 
138, 184; and chemical use, 87; and non- 
governmental organizations, 88; health 
alerts, 88; noise pollution, 185; soil degra- 
dation, 87; toxic waste, 88; water pollu- 
tion, 88, 172-73; water tables, 87 

Environmental Protection Organization 
(EPO),88 

EPO. See Environmental Protection Orga- 
nization 
eran spahbod, 1 1 

Esfahan, 89, 101, 128, 131, 134, 163, 179, 
186 

Esfahan nuclear plant, 286, 287 

ethnic groups (see also individual group 

names), 91-101 
Ettela'at (newspaper), 47, 55, 238 
EU. See European Union 
EU3, 242, 243, 286 



335 



Iran: A Country Study 



European Community (EC) {see also Euro- 
pean Union (EU)), 198 

European Union (EU), xlvii, 72, 73; rela- 
tions with Iran, 240-43 

Exchange Allocation Commission, 201 

exchange rate policy, 73, 201 

executions, political, 234, 235 

Executives of Construction, 76, 77, 208, 
210, 231 

Expediency Council, 68, 167, 212, 213, 

217, 222-23, 226 
exports {see also petroleum): nonoil, 199, 

201; obstacles, 200; of electricity, 191; 

policy, 200 

F-4D/Es interceptor, 267 
F-5 fighter, 274 
F-5E/F fighter, 267 
factionalism in ruling class, 67 
family, 112-15; marriage traditions, 113— 
15; relation to society, 113; structure, 113 
Fao Peninsula, 68 

faqih {see also Leader), xliv, 45, 56, 216, 

218-20 
Fars. See Persian 
Fars Province, 10, 97, 98 
Fatemi, Hussein, 34 
FathAli Shah, 22 
Fatima, 120, 124 

FDI. See foreign direct investment 
Fedayan. See Fedayan-e Khalq 
Fedayan-e Islami. See Islamic warriors 
Fedayan-e Khalq (People's Warriors), xlii, 

45,64,117,269 
Federal Republic of Germany. See West 

Germany 
Ferdowsi, 93 
fertility rate, 89 
film in Iran, 239-40 
financial reform, 28, 194, 195, 201 
Finnish language, 97 
First Imam {see also Ali) , 120 
fiscal policy, 191-94 
fishing industry, 172-73 
Followers of the Line of the Imam and the 

Leader, 232 
foreign debt, 74, 201 
foreign exchange, 201-2 
foreign investment, 202, 215, 249 
foreign relations, 29-30, 32, 34, 69, 71, 72, 

240-51; regional, 243-48; under Ahmadine- 



jad, xlv; with Europe, 240-43; with states of 
the former Soviet Union, 246-47; with the 
United States, xlvi-xlvii, 248-51 
forests, 172 

Foundation of the Disinherited (Bonyad-e 
Mostazafin), 54, 73, 139, 219 

France: arms sales to Iran, 265, 273; as emi- 
gre destination, 89; EU3 activities, xlvi, 
242, 286; natural gas development, 166; 
relations with Iran, 1980s, 69 

freedom, personal and political {see also 
civil liberties; human rights): xliii, xliv, 
234-37 

freedom of assembly {see also civil liberties; 
human rights), 234, 236 

freedom of association {see also civil liber- 
ties; human rights) , 236 

freedom of speech {see also civil liberties; 
human rights), xliii-xliv, 235 

freedom of the press {see also civil liberties; 
human rights): conservative restrictions 
on, xliv; in 1979 constitution, 234; Reza 
Shah Pahlavi's restrictions, 28; Rafsan- 
jani's policies, 74-76; under Mohammad 
Khatami, 237-38 

free-trade zones, 73 

Friday prayer sermons, 219 

Friendship Line (railroad), 186 

Gardun (journal), 74 

gasoline: consumption, xlvii; importing, 

163; refining, 163; subsidies, xlvii 
Gaumata, 7 
Gaza Strip, 245 

GCC. See Gulf Cooperation Council 
GDE. See gross domestic expenditure 
GDP. See gross domestic product 
Gendarmerie, 276, 277, 278 
General Accounting Act (1934-35), 28 
General Command of the Armed Forces 

Joint Staffs, 262 
Genghis (Chinggis) Khan, 17 
Georgia, occupation by Ottomans, 20, 21 
Germany: and Bushehr, 72; as emigre des- 
tination, 89; EU3 activity, 242, 286; Iran's 
World War II policy toward, 30; relations 
with Islamic Republic, 241; trade with 
Iran, 30, 199, 200 
Ghazali, Abu Hamid, 16 
Ghazan Khan, 17 
Ghazna, 16 



336 



Index 



Ghaznavid dynasty, 16 
Ghuzz Turks. See Oghuz Turks 
Gilaki dialect, 92 
Gilan Province, 96, 97 
GNP. See gross national product 
Goftegu (periodical), 74 
Golan Heights, 245 
Golestan Province, 98 
Gonbad-e Kavus, 98 
Gorgan, 98 
Gorgan Province, 55 
government investment, 73 
government strucmre, 215-24 
Great Britain. ^Britain; United Kingdom 
Greater and Lesser Tunbs, 44 
Greek influence in Iran, 10 
gross domestic expenditure (GDE), 159 
gross domestic product (GDP), xlvii, 156, 
158-59 

gross national product (GNP), 148 

ground forces. See army 

Guardians Council, 61, 67, 209, 211-12, 

213,214,216, 222,225-26, 227 
guerrilla activities in Iran, 45-46, 63-64, 65 
guided missile frigates, 266 
guilds, 232 

Gulf Cooperation Council (GCC), 282 
Gulf of Oman; fisheries, 172, 173; ports, 
186 

Gulf War (1990-91), 70, 281-82 
Gulistan, Treaty of, 22 



Hafez, 93 

hajj (pilgrimage), 119 
Hakamanish. S^Achaemenes 
Hamadan, 131 
Hamadan Province, 93, 97 
Hamas, 282 

Hambastegi (newspaper), 238 
Hamshsahri (newspaper), 77 
handicrafts, 21, 173-74, 182 
Hashemi, Mehdi, 70 
Hashim, House of, 15 
Hashimite clan, 13 
Hazara militias, 247 

health care, 135-38; primary, 136, 137; 

specialized, 137 
Health Corps, 38 
health hazards, 137-38 
heavy industry, 178-80; limiting factors, 

178-79; major components, 178 



heavy water manufacturing, 288 
hejab, 117, 129 

helicopters: air force, 267, 269; army, 266 
Heraclius, 13 
Herat, 22, 186 
heroin, 138 
hezbollahis, 55, 61, 66 

High Council (Tehran Stock Exchange), 
196 

HIV. See human immunodeficiency virus 
Hizballah, 71, 73, 245, 282 
Holy Cross, 13 
Hormoz, 21 

Hormuz, Strait of, 185, 266 

hoseiniyeh (Islamic center), 121 

Hoseiniyeh Irshad, 121 

Hosseini, Ghaffar, 76 

hostage crisis of 1979-81, xliii, 57, 60, 149 

hotels, 183 

housing industry, 180 

hovercraft, 264 

Hoveyda, Amir Abbas, 40, 47, 50, 54 
Hulagu Khan, 17 

human immunodeficiency virus (HIV), 
138 

human rights {see also civil liberties), 233-37; 
constitutional guarantees, 233-34; freedom 
of assembly, 234, 236; freedom of speech, 
xliii-xliv, 235; freedom of the press, xliv, 28, 
74-76, 234, 237-38; improvements, 234- 
35; religious rights, 234; repression of the 
1980s, 234 

Hungarian language, 97 

Hussein, son of Ali, 15, 120 

Hussein, Saddam, 61, 68, 69, 70, 91, 233, 
239, 281,282 

Husseini, Sheikh Ezz ad Din, 55 

hydroelectric power, 190 

IAEA. See International Atomic Energy 
Agency 

IFM. See Iran Freedom Movement 

IIPP. See Islamic Iran Participation Party 

Dam Province, 89, 93, 95 

ILO. See International Labor Organization 

ILSA. See Iran-Libya Sanctions Act 

Ilsavan people, 98 

imam, 119 

Imam Khomeini International Airport, 
188 



337 



Iran: A Country Study 



Imam Khomeini Relief Committee, 136, 

139, 140, 219 
Imam Reza, shrine of, 29 
imam's committee, 51 
imamzadeh (shrine), 124, 125 
IMF. See International Monetary Fund 
impeachment, of Bani Sadr, 63 
Imperial Bank of Persia, 24 
Imperial Guard, 49 

Imperial Iranian Armed Forces, 263, 264 
imports: composition, 198-99; financing, 

xlvii; of electricity, 191; policy, 74, 198; 

sources, 198-99; volume, 198-99 
income: average annual, 158; distribution, 

158 

incorporated cities, 226, 227 

India, 127, 166, 248, 274 

Indo-European languages: first speakers in 
Iran, 6; Persian as part of Indo-European 
family of languages, 92 

Indo-Iranian languages, 91, 95, 96 

industrialization, 87, 146 

industrial sector (see also construction; 
handicrafts; heavy industry; manufactur- 
ing), 173-80; geographic location, 164; 
growth rates, 158-59; heavy industry, 
178-80; large industries, 176-78; share 
of employment, 155-56; small industries, 
176 

industry. See industrial sector 

infant mortality, 137 

inflation, xlvii, 147, 197 

informal sector, 159 

Inju dynasty, 17 

inoculation, 137 

insurance sector, 181-82 

intelligence services, 276-77 

intercontinental ballistic missile, 273 

interior basins, topographical, 85 

internal security (see also security forces), 
276-78; intelligence services, 276-77; law 
enforcement, 277-78; unofficial agen- 
cies under Islamic Republic, 277 

international airports, 188 

International Atomic Energy Agency 
(IAEA), xlv-xlvi, 242, 285, 286, 287 

International Court of Justice, 33, 60 

international currency reserves, 202 

International Labor Organization (ILO), 
156 

international loans, xlvii, 201 



International Monetary Fund (IMF), 151, 
201 

international trade, 146-47, 197-200 

Internet access, 189, 213, 214, 239 

Internet cafes, 189, 239 

investment: foreign, xlviii, 72, 73, 162, 163, 
165, 167, 179, 183, 202, 215, 249; growth 
rates, 159; income from, 201; in equip- 
ment, 159, 176; private, xlv, 147, 153, 
169, 180; state, 146, 147, 150-53, 162, 
168, 169 

IPRP. See Islamic People's Republican 

Party 
Iran Air, 188 

Iran Aircraft Industries, 269 

"Iran: Complete Regulations of the Islamic 
Republic of Iran Armed Forces" (military 
doctrine), 280 

Iran-Contra Affair, 68 

Iran Daily (newspaper) , 238 

Iran-eFarda (periodical), 74 

Iran Freedom Movement (IFM), 45, 58, 
66, 75, 212, 232 

Iran Helicopter Support and Manufactur- 
ing Industry, 274 

Iranian Medical Association (IMA), 137 

Iran-India Shipping Company, 186 

Iran Insurance Company, 181 

Iran-Iraq War (1980-88), xliii, 61, 68-69, 
150, 257, 261, 269, 270-71, 272, 281-82 

Iran Khodro company, 178 

Iran-Libya Sanctions Act (ILSA), 72, 248- 
50 

Iran News (newspaper), 238 

Iran Novin Party, 37, 38 

Iraq (see also Iran-Iraq War): conflict of 

2003-, xlvi-xlvii, 244, 251, 280, 283-84; 

in "axis of evil," 250; Iran arms supply in, 

xlvi-xlvii; relations with Iran, 42, 44, 243- 

44, 282, 283 
Iraqi Kurds, 94 

IRGC. See Islamic Revolutionary Guard 
Corps 

IRIP. See Islamic Republic of Iran Police 
IRP. See Islamic Republican Party 
irrigation, 96, 168 

Islam: basic principles, 119-22; establish- 
ment by Muhammad, 13; introduction 
into Iran, xxxix, 13-15; schism of Shia 
and Sunni, 14-15; shrines, 119-20 

Islamic Coalition Organization, 231 

Islamic conquest, 13-15 



338 



Index 



Islamic Free University, 135 
Islamic Iran Builders Council, 213, 214, 
232 

Islamic Iran Participation Party, 229-30 

Islamic Iran Solidarity Party, 230 

Islamic Iranian Ground Forces {see also 

army) , 264-65 
Islamic Labor Party, 230 
Islamic mysticism. S^Sufism 
Islamic Nations Party, 231 
Islamic People's Republican Party (IPRP), 

52 

Islamic Propagation Office, 219 
Islamic Republican Party (IRP), 52, 58, 66 
Islamic Republic of Iran: constimtional 
establishment, xlii, 216; government 
structure, 215-24 
Islamic Republic of Iran Broadcasting, 238 
Islamic Republic of Iran Police (IRIP), 278 
Islamic Republic of Iran Shipping, 186 
Islamic Revolution (1978-79), xxxix, xl, 

xlii-xliii, 51-56, 216 
Islamic Revolutionary Guard Corps (IRGC; 
Pasdaran; in full, Pasdaran-e Engelab-e 
Islami) : arms acquisition and production, 
270, 274; establishment, 54, 260-61; in 
Supreme National Security Council, 218, 
279; reorganization, 262; roles, 269-70, 
279 

Islamic socialist groups, 233 
Islamic Warriors (Fedayan-e Islami), 231 
Islamic values and principles, xliii-xliv, 
216, 233 

Ismail (Safavi leader), xxxix, 18, 127 
Ismaili(s), 16, 127 

Israel, 50, 71, 132, 148, 245, 265, 273, 275, 

282, 284; bombings in, 1995-96, 72 
Italy, 179, 198-99, 200, 265, 273 

J-7 fighter, 267 

Jalayirid dynasty, 17 

Jaleh Square incident, 49, 260 

Jameh. See Combatant Clerics Association 

Japan, xlviii, 198-99, 200 

Jesus (see also Christ) ,119 

Jews: in Iran, 94, 131-32; representation in 

Majlis, 221 
jihad, 119 

Joint Chiefs of Staff, 262 
Joint Staff Office, 262 



Joint Staff of the Armed Forces, 218, 263, 
277 

Jomhuri-ye Islami (newspaper), 238 

judiciary, 223-24; antireform measures, 209, 
211, 212, 213, 214, 225; constitutional 
authority, 223-24, 225; head of, 223; 
under Rafsanjani, 75 

jury trial, 224, 235-36 

justice, minister of, 223 

Kabir, Mirza Taqi Khan Amir, 23 
kadkhoda, 109, 227 
Raman (patrol boat), 266 
Kangan, 165 

Kani, Mohammad Reza Mahdavi. See Mah- 

davi Kani, Mohammad Reza 
Karaj, 89 

Karbala, 15, 120, 124 
Karbaschi, Hussein, 77 
kargar (working class) , 106 
Karine A incident, 246, 250 
Karkheh River, 86 
Karrubi, Mehdi, 210, 214, 215 
Karun River, 24, 86 
Kashan, 131 

Kayhan (newspaper), 55, 238 

Kayhan International (newspaper), 238 

Kazemi, Zahra, 235 

Kazim, Musa al (Seventh Imam), 18 

KDP. See Kurdistan Democratic Party 

Kelk (periodical), 74 

Kennedy, John F., 36 

Kerman, 99, 185 

Kerman Province, 130 

Kermanshah, 94 

Kermanshah Province, 93, 127 

kerosene, 163 

Khaf, 186 

Khamenei, Sayyid Ali: antiwestern cultural 
policy, 75; economic policy, xlvii-xlviii, 
153; elections as president, 63, 66; exer- 
cise of power as Leader, xliii, 225-26; for- 
eign policy, 72, 249; relations with 
Ahmadinejad, xlvi; relations with Moham- 
mad Khatami, 209, 225; relations with 
United States, 249-50; succession to 
Khomeini, xliii, 70 

Khan, A.Q., 248, 287 

Khan, Malkam, 24 

Khan, Reza. S^Pahlavi, Reza Shah 

Khark (Kharg) Island, 68, 266 



339 



Iran: A Country Study 



Kharrazi, Kamal, 240 

Khatami, Mohammad: and nuclear issue, 
286; as minister of culture, 74; cabinets, 
208; economic reform, 211; elected pres- 
ident, 1997, 77, 207, 208; foreign policy, 
xlv, 241-46, 249; loss of support, 211-12; 
party restrictions loosened, 208; petro- 
leum policy, 162, 165; political liberaliza- 
tion under, xliv, 208; political support 
groups, 208-10, 230-31; re-election, 
2001, 212; relations with Khamenei, 209, 
225; second term of, 212-15 

Khatami, Mohammad Reza, 229 

Khayyam, Omar (Umar), 16 

Khazal, Sheikh, 27 

Khoi, 97 

Khomeini, Sayyid Ruhollah Musavi: agri- 
cultural policy, 1980s, 169; arrest, 1963, 
37; changes following death of, xliii, 70, 
276; conciliation of government factions, 
1980-81, 62, 65; definition of Islamic 
state, 1988, 67; economic policy, 1980s, 
149-50; exercise of power as Leader, 
225-26; exile activities, xlii, 39, 45; for- 
eign policy, 1984—89, 69; initial reforms, 
1979, 51, 56; land policy, 109; military 
policy, 280; policy leadership, 276, 280; 
reorganization of the military, 260-61; 
role in 1989 constitution, 216; return to 
Iran, 1979, xlii, 51, 260; shrine for, 124; 
writing against Reza Shah Pahlavi, xli 

Khorasan, 15 

Khorramabad, 95 

Khorramshahr, 86, 100, 185 

Khuzestan Arabs, 100 

Khuzestan Plain, 85, 87 

Khuzestan Province, 6, 54-55, 100, 261 

Khwarezm. See Chorasmia 

Kianuri, Nureddin, 66 

Kilo submarine class, 266 

Kirmanji language, 91, 94 

Kish, 182 

KishFree Zone, 73, 182 

Kiyan (periodical), 74, 237, 238 

Kohgiluyeh va Buyer Ahmadi Province, 95 

Komela (organization), 269 

Komela (party), 94 

Koran. See Quran 

komiteh-ye imam. See imam's committee 
komitehs. See revolutionary committees 
Kurdish issue, 44, 283 
Kurdish Republic of Mahabad, 31, 32 



Kurdistan Democratic Party (KDP), 55, 63, 
94 

Kurdistan Province: ethnic population, 93, 
99; Soviet troops in, 1944, 31; Sufis in, 
127 

Kurdistan Workers' Party (PKK), 246 
Kurds, 54, 58-59, 91, 93-94, 127, 246 
Kuwait, 70, 71, 243 



labor force, 106, 109, 148, 153-54 

labor unions, 106-7, 156, 236 

Lake Urmia, 86, 99 

land reform, 36-37, 41, 67, 109, 110 

land war, capacity for, 284 

language disputes, 55 

Lar region, 127 

Larijani, Ali, xlvi, 215 

Latin alphabet, 97 

Law Enforcement Forces, 278 

Law for the Expropriation of the Property 
of Fugitives, 67 

lawyers, role of, 224, 235 

Leader {see also faqih): constitutional basis 
of office, 216; controversy over authority, 
xliii-xliv, 216; criteria for office, 220; 
exercise of power, 225-26; modification 
of authority, 1989, 218; powers, 218-20, 
263; staff and representatives, 219 

Leader of the Revolution. See Leader; faqih 

Lebanon, 71, 244-45 

legal system. See human rights; judiciary 

Libya, 273 

life expectancy, 136 

liquefied petroleum gas (LPG), 163 

literacy rate, 135 

Literacy Corps, 37 

livestock, 168, 170 

local councils, 209, 227 

Local Elections Supervision Board, 228 

local government, 226-27 

Lord Curzon, 26 

lower class, 107-8, 139 

LPG. See liquefied petroleum gas 

Luri language, 91, 94 

Luristan Province, 95 

Lurs, 91, 94-95 



M-107 howitzer, 265 
M-109 howitzer, 265 
M-113 armored vehicle, 265 



340 



Index 



M-46 field gun, 265 

M-60 tank, 273 

Mada. See Medes 

Madain {see a&o Ctesiphon), 13 

madrassa (seminary), 121, 124, 126 

Mafi, Nezam os Saltaneh, 26 

Mahabad, Kurdish Republic of. See Kurd- 
ish Republic of Mahabad 

Mahdavi Kani, Mohammad Reza, 63 

mahriyeh (term of marriage), 114 

main battle tanks, 265 

Majlis (parliament): constitutional author- 
ity, 221-22; disputes with Guardians 
Council, 67, 68; elections, 1960, 36; elec- 
tions, 1963, 37; elections, 1980, 58; elec- 
tions, 1984, 66; elections, 1992, 75; 
elections, 1996, 76; elections, 2000, 209- 
10; elections, 2004, 213-14; establish- 
ment, xl; laws passed, 2000, 211; military 
budget limitations, 259; opposition to 
Qajar rulers, 25; minority representation 
in, 128, 221; officials of, 222; party compo- 
sition, 37-38, 210, 214; role in Rafsanjani 
government, 76; role in World War II gov- 
ernance, 31, 32 

Makran highlands, 95 

maktab (primary school), 121, 132 

Malaysia, 166 

Malik Shah, 16 

Mamluks, 17 

Management and Planning Organization 

(MPO), 152, 191 
Mansur, Hasan Ali, 38, 39 
manufacturing, 176-80 
Maragheh, 97 
Marathon, Batde of, 7 
Mardom Party, 35, 38 
Mardom Salari (newspaper), 238 
marine police, 278 
marja-e taqlid (title), 216, 218 
marriage, 113-15 
marshes, 85, 86 
Marun, 165, 167 
Marxist groups, 233 
Mashhad, 89, 134, 185 
mashti (tide), 124 

mass media, 188-89, 237-40; restrictions 
on, xliv, 189, 208, 209, 210, 234-35, 237- 
39; trends since 1979, 237-38 

Masumeh, Hazrat-e, 182 

mayors, 227 

Mazandaran Province, 96, 97, 99 



Mazandarani dialect, 92 

MCC. See Money and Credit Council 

Mecca, 13 

Medes, 6 

Media, 10 

medical colleges, 137 
medical personnel, 136-37 
Mehrabad Air Base, 269 
melli mazhabi, 232 
Melliyun Party, 35 

merchants {see also bazaar; retail trade), 

102, 105, 181,231 
Mesopotamia, early cultures, 6 
Mesopotamia Plain, 85 
Mi-8 helicopter, 266, 267 
Mi-17 helicopter, 266 
middle class, 105, 148 
Middle Persian language, 11, 92 
MiG-27 fighter, 267 
MiG-29 fighter, 267 
MiG-29A fighter, 267 
MiG-31 fighter, 267 

migration, rural-to-urban, 102-3, 108, 109 
migratory birds, 88 

Militant Clerics Association, 75, 77, 230, 
231 

Military Defense Organization, 274 

military doctrine, 280-85; and asymmetri- 
cal warfare, 284; influence of Iran-Iraq 
War, 281-82; naval phase, 285; post-2001 
modifications, 283-84; principles of, 
280-81, 284-85; role of conventional 
forces, 284; role of missiles, 283-84, 285; 
role of nuclear weapons, 284 

military reform: by Reza Shah Pahlavi, 27; 
by Mohammad Reza Shah Pahlavi, 44; 
under Islamic Republic, 260-61, 262, 
264-65 

mines, military, 266 

mining, 167-68; geographic location, 164; 

government ownership, 167; growth rate, 

167-68; infrastructure for, 168; output, 

167; private ownership, 167 
Ministry of Agriculture, 54 
Ministry of Defense, 264 
Ministry of Defense and Armed Forces 

Logistics (MODAFL), 262, 263 
Ministry of Education, 129 
Ministry of Energy, 190 
Ministry of Finance, 38, 73 
Ministry of Health, 136-37, 138 
Ministry of Industry, 151 



341 



Iran: A Country Study 



Ministry of Information and Security 

(MOIS),211,215, 270, 276 
Ministry of Interior, 227, 228, 278 
Ministry of Islamic Culture and Guidance, 

239-40 
Ministry of Labor, 106 
Ministry of Mining and Metals, 151 
Ministry of Petroleum, 161, 167 
Ministry of Power and Electricity, 190 
Ministry of Science and Higher Education, 

40 

Ministry of the Islamic Revolutionary 

Guard Corps, 263, 270 
minisubmarines, 267 
Mir Alai, Ahmad, 76 

missile acquisition and production, 72, 
262, 274, 275 

missile patrol boats, 266, 273 

Mithradates II, 10 

Mizan (newspaper), 62 

Moallem Kaleyah, 287-88 

mobadan mobad, 1 1 

Mobarakeh, 179 

mobile telephones, 189 

"Mobile Units of God's Vengeance," 65 

MODAFL. See Ministry of Defense and 
Armed Forces Logistics 

Moderation and Development Party, 232 

Moghan Plain, 98 

Mohajerani, Ataollah, 209 

Mohammad Ali Shah. See Ali Shah, Moham- 
mad 

Mohammad Reza Shah Pahlavi. See Pah- 

lavi, Mohammad Reza Shah 
Mohammad Shah, 22 
Moharram, 119-20, 128 
Moin, Mostafa, 215 

MOIS. See Ministry of Information and 
Security 

Mojahedin. See Mojahedin-e Khalq 

Mojahedin of the Islamic Revolution Orga- 
nization, 230 

Mojahedin-e Khalq (People's Fighters), 
xlii, 45-46, 63, 64, 233, 249, 269 

mojtahed (title), 223 

Money and Credit Council (MCC), 195 
Mongol rule in Iran, 17-18, 127 
Montazeri, Ayatollah Hosain Ali, 50, 66, 69 
morals police, 75 
mosque, 121 

Mossadeq, Mohammad, xli, xlii, 32, 33, 34, 
160, 250, 259, 278 



Motalafeh. See Islamic Coalition Organiza- 
tion 

motekhassesin (class), 148 
motor vehicles, 183-85 
mountains, 85 
Mount Damavand, 85 
Mount Sabalan, 98 

MPO. See Management and Planning Orga- 
nization 
Muawiya, 15 

Muhammad (prophet), 13, 118, 119, 120 
Muhammad, Mirza Ali. See Ali Muham- 
mad, Mirza 
mujtahids (religious scholars), 125, 126 
Mulk, Nizam al, 16 
mullah, 121 

multiple exchange-rate system, 201-2 
multiple-rocket launchers, 265, 274 
Musavi Ardabili, Abdol Karim, 58 
Musavi, Mir Hosain, 63-64, 66 
muta (temporary marriage), 115 
mutavalli (title), 125 
Muzaffarid dynasty, 17 

Nader Shah, 21 

Nagorno-Karabakh, 247 

Nahavand, Battle of, 13 

Nakhichevan, 185 

namaz (ritual prayer), 119 

Naqshbandi, 127 

narcotics, 96, 138 

National Council of Resistance, 63 

National Democratic Front, 63 

National Front, xli, 32, 33, 34, 35, 36, 37, 
45,48,49, 50, 61,232 

national health insurance, 136 

national history, Iranian view of, xxxix 

National Iranian Oil Company (NIOC), 
40, 160-62; 164-65 

nationalization: of banks and insurance 
companies, 195; of petroleum, xli, 32- 
34,160-62 

National Petrochemical Company, 167 

National Police, 276, 277 

National Radio and Television Organiza- 
tion, 188 

NATO. See North Atlantic Treaty Organi- 
zation 

natural gas, 165-66; consumption, 166; in 
power generation, 190; output, 165-66; 
processing, 165-66; reserves, 164, 165; 



342 



Index 



subsidies, 165; trade, 166, 246; transport, 
165 

Natural Resources, Department of, 172 
navy, 266-67; aircraft, 266; equipment, 
266-67; in military doctrine, 285; mod- 
ernization, 266 
Nazeat missile, 274 

Nestorian Church. ^Assyrian Church of 

the East 
newspapers, 237-38 

Nezam os Saltaneh Mafi. See Mafi, Nezam 

os Saltaneh 
NGOs. See nongovernmental organizations 
Nicaragua, 68 
Nicoo company, 162 
Nimatollahi, 127 

NIOC. See National Iranian Oil Company 
Nixon, Richard M., 44 
Nixon Doctrine, 44 
Nodong missile, 275 
nomads, 110-12 
Non-Aligned Movement, 261 
nongovernmental organizations (NGOs), 
88, 233 

North Atlantic Treaty Organization (NATO) , 
262, 283 

Northern Alliance (Afghanistan), 247, 250 
Northern Sheelat Company, 172 
North Khorasan Province, 93, 96, 97, 99, 
127 

North Korea, 68, 265, 273, 275 
North-South Corridor, 186 
NowShahr, 186 

Nuclear Non-Proliferation Treaty (NPT), 
242, 286 

nuclear power, xlv, 190, 242, 285-88 

nuclear reactors, 285-86 

Nuclear Technology Research Center, 287 

nuclear weapons issue, 285-87; as foreign 
policy issue, xlv-xlvi, 72, 240, 242, 243, 
249, 251; early U.S. opposition, 72; early 
European opposition, 242; national secu- 
rity aspects, 286-87 

Nur, Mirza Hussein Ali. See Ali Nur, Mirza 
Hussein 

Nuri, Abdullah, 210 

Nuri, Ali Akbar Nateq, 77 

nurses, 137 



Office for Consolidating Unity, 230 



Office of the Prime Minister, under Moham- 
mad Reza Shah Pahlavi, 277 
Oghab missile, 274 
Oghuz Turks, 16 
oil. See petroleum 

Oil Stabilization Fund (OSF), xlviii, 193 
Old Persian language, 9, 92 
Old Syriac language, 100 
Oman, xlviii, 243 

OPEC. See Organization of the Petroleum 

Exporting Countries 
Operation Ajax, 34 
Operation Karbala V, 68 
opium, 138 

Organization of Iranian Handicrafts, 182 
Organization of the Petroleum Exporting 

Countries (OPEC), 160, 162, 200 
Oriental Feminine Congress, 116 
Orumiyeh, 101 

OSF. See Oil Stabilization Fund 
Oslo Accord, 245 
Oslo peace process, 71 
ostans. See provinces 
Ottoman Empire, 20, 21 
Ottomans, 20, 21 



Pahlavi. See Middle Persian language 

Pahlavi dynasty (1925-79) {see also Pahlavi, 
Mohammad Reza Shah; Pahlavi, Reza 
Shah),xl,xli, 27-50 

Pahlavi Foundation, 54, 139 

Pahlavi people, 96 

Pahlavi script, 1 1 

Pahlavi, Farah Diba, 40 

Pahlavi, Mohammad Reza Shah: and nuclear 
power, 285; conflict with clergy, 125; coro- 
nation, 1967, 41; departure from Iran, 50, 
260; economic policy, xli, 46, 147-49; edu- 
cation policy, xli, 40, 46, 133-34; exile and 
death, 60; expansion of armed forces, 44, 
259; fall of regime, xlii, 51-52; foreign pol- 
icy, xli, xlii, 42, 44; in the United States, 57; 
military policy, 259-60, 276, 279-80; policy 
toward political parties, 37-38, 40, 44-45, 
47; policy toward women, 116; reform 
efforts, xli, 35-37, 40, 46, 147; relations with 
Western powers, xli; resettlement policy, 
1 12; rural policy, 109; social policy, 139; suc- 
cession to throne, xli, 30; White Revolution, 
37 

Pahlavi, Reza, 41 



343 



Iran: A Country Study 



Pahlavi, Reza Shah (see also Reza Khan): 
abdication, xli, 30, 258; conflict with 
clergy, 125; economic policy, xli, 146, 
173; education policy, 28, 133-34; expan- 
sion of armed forces, 258; foreign policy, 
29-30, 258; freedom of the press under, 
28; industrial policy, 173; internal security 
policy, 258; land policy, 29; moderniza- 
tion program, xli, 27-28; repressive mea- 
sures, xli, 28, 29; resettlement policy, 28, 
111-12; rise to power, xli, 28; tax policy, 
28, 29; trade policy, 146 

Pakistan, 166, 247-48 

Palestine, 132 

Palestine Liberation Organization (PLO), 
245 

Palestinian Authority, 246 
Palestinian Islamic Jihad, 71, 73 
Palestinian-Israeli agreement, 1993, 71 
Palestinian question, 245, 249 
Palestinians, 72 
Pan-Iranist Party, 40 
Papak, 11 

Paris, Treaty of (1857), 22 

Parni tribe, 10 

Parsa (group). See Persians 

Pars gas field, 72, 165 

Pars Special Economic Energy Zone, 165 

Parsa (region). S^Shiraz 

Parsua. ^Persians 

Parthia, 7 

Parthians. S^Arsacids 

Pasdaran. See Islamic Revolutionary Guard 
Corps 

Pashtu language, 95 

Payam-e Nur, 135 

Paykan, 178 

peasants, 109, 110 

Peloponnesus, 9 

pension programs, 139-40 

per capita income, 158 

Persepolis, 9-10 

Persian Cossacks Brigade, 25 

Persian Gulf: British withdrawal from, 42, 
257; continental shelf distribution, 44; 
fisheries, 172; ports, 186; security issues, 
44, 266, 280, 281; territorial dispute in, 
244; U.S. presence, 72, 281-84 

Persian Gulf War, 262, 281 

Persian language, xxxix, 9, 91-93 

Persians: first entry into Iran, 6; language 
and culture, 91-93 



Peshmerga (organization), 269 

petrochemical industry, 166-67 

petroleum: consumption, xlvii, 163; his- 
tory, 160-62; industry, 160-66; national- 
ization, 160-62; output, 162-63; refining, 
xlvii, 163; reserves, 162; revenue, xlviii, 
35, 147, 148, 149, 150, 161, 176, 192, 201, 
272, 273, 279; trade, xlvii, 162, 163-66, 
201 

Peykar (organization), 64, 269 
pilgrimage, 119, 124, 125 
pillars of faith, in Shia Islam, 119 
pipelines, 163, 165, 166, 246 
Piranshahr military base, 60 
Pishevari, Jafar, 31 
pistachios, 170 

PKK See Kurdistan Workers' Party 

Plan Organization (for economic develop- 
ment plans), 32, 38 

Planning and Budget Organization, 54, 
73, 218 

Plataea, Battle of, 9 

PLO. See Palestine Liberation Organiza- 
tion 

plutonium extraction, 242, 286 
poison gas, military use, 68 
police, 277-78 

Police-110 (organization), 278 

political elite: credentials for, 104-5; tradi- 
tional, 102; transformation, 1980s, 103 

political factions and groups, xlii, xliii-xliv, 
229-33; and welfare policy, 135-36; con- 
stitutional basis, 229 

polygyny, 114-15 

Popular Mobilization Army. See Basij 
popular protests: against economic condi- 
tions, 1992, 74; against gasoline ration- 
ing, xlvii; against Mohammad Ali Shah, 
1908-9, 25; against Mohammad Reza 
Shah Pahlavi, xlii, 260, 279; against Qajar 
Dynasty, xl, 25; against Rajai govern- 
ment, 61, 63; against Reza Shah Pahlavi, 
28; against tax increases, 1965, 39; and 
reforms of the 1960s, 36-37; by unions, 
156; in 1997, 209; in 2003, 213; in the 
1950s, xli, 35; in the 1970s, 46, 47-51; 
repression of, 2000s, 235-36 
population, 88-91; and emigration, 89-90; 
birthrate, 89; by age and sex, 89, 90; 
death rate, 89; density, 89; fertility rate, 
89; growth, 89; infant mortality, 137; refu- 
gees, 90-91; total, 88-89; urban-rural, 89 



344 



Index 



ports, 186 

Portuguese, in Persian Gulf, 20 

poverty, xlii, xliv, xlviii; distribution in soci- 
ety, 139; official definition, 139 

presidency, Islamic Republic, 221; election, 
1980, 57; election, 1981, 63; election, 
1985, 66; election, 1989, 70; election, 
1997, 208; election, 2001, 212; election, 
2005, 214-15 

Press Court, 224 

primary health care clinics, 136 

private property, xlii 

prime minister, office of, 218 

private sector: as tax base, 192; employ- 
ment in, 155; in housing industry, 180; in 
insurance, 182; in manufacturing, 176; 
in retail trade, 181; in steel industry, 179 

privatization, xlvii-xlviii, 73-74, 151, 176 

Progressive Center, 37 

prophets, Old Testament, 119 

prosecutor general, 223 

Protestants in Iran, 128 

provinces, 226-27 

provisional government, 1979, 260 

Ptolemaic kings, 10 

public sector: employment in, 155; role of 

government in the economy, 150-53 
public trial, right to, 224, 234 
purge of 1980, 58 

Qadikolahi, 96 

Qadir submarine, 267, 275 

Qadiri, 127 

Qajar, Agha Mohammad, 22 

Qajar dynasty, xl, 22-27; and nomads, 111; 
collapse, 24-27; education policy, 132- 
33; external pressures, 22-24; handicraft 
industries, 173; reforms, 24; religious pol- 
icy, 130; state structure, 22 

Qajars, 21,99 

Qalibaf, Mohammad, 215, 278 
^awadrrigation systems, 17 
Qasemlu, Abdol Rahman, 55, 76 
Qashqai, Khosrow, 64 
Qashqai confederation, 98 
Qashqais, 64, 97-98 
Qasr-e Shirin, Treaty of, 20 
Qatar, 243 
Qavam, Ahmad, 31 
Qazvin Province, 97 
Qeshm free-trade zone, 73 



qizilbash (military force), 18, 20, 21 

Qods Corps, 270 

Qom, 89, 121 

Qotbzadeh, Sadeq, 65 

Quli, Tahmasp, 21 

Quran, 100, 120 

Quraysh tribe, 13 

radio broadcasting, 188, 238; from abroad, 
238-39; to foreign countries, 238 

Rafsanjani, Ali Akbar Hashemi, 58, 69, 70, 
93,210,215 

Rafsanjani presidency, 70-76; economic 
policy, 73-74; foreign policy, xlv, 71, 241, 
245, 248; freedom of speech in, 75-76; 
media policy, xliv; military reorganiza- 
tion, 262; national security policy, 261- 
62; relations with conservatives, 75; social 
policy, 74 

railroads, 185-86 

Rajai, Mohammad Ali: elected president, 

63; government of, 58-63 
Rajavi, Masoud, 63, 233 
Ras al Khaymah, sheikh of, 44 
Rashid ad Din, 17 
Rastakhiz (party) , 48 
Razavi Khorasan Province, 96, 97, 99, 127 
Razmara, Ali, 33 

RCD. See Regional Cooperation for Devel- 
opment 

Reagan, Ronald W., 60, 68, 69 

recession of 1959-63, 39 

referendum (institution) , 229 

referendum of 1963, 36-37 

referendum of 1979, 56 

reformists (political bloc): "active calm" 
strategy, 2000, 211, 212; fissures in move- 
ment, 211, 212; issues of concern, 208, 
210; origin, xlii; reformist coalition, 208- 
10, 229-31; success of, 1997-2003, 208- 
9, 210; under Khatami, 208-15, 225, 226, 
229-30 

refugees in Iran, 90-91; Afghans, 90-91; 

Iraqis, 91 
regency. See succession issue 
Regional Cooperation for Development 

(RCD), 42 

religion: 118-32; religious minorities, 128- 

32; right to practice, 234 
religious hierarchy, Shia, 125-26 
religious shrines, 182 



345 



Iran: A Country Study 



Republic of Korea. See South Korea 

Resalat (newspaper) , 238 

resettlement: by Reza Shah Pahlavi, 27, 28; 

of Lurs, 95; of nomadic societies, 110-12; 

of Oashqais, 98; of Turkmens, 98 
restaurants, 183 

retail trade {see also bazaar; merchants), 
181 

retirement programs, 139-40 
revolutionary committees, 51, 52, 65 
Revolutionary Council, 52-53, 57 
revolutionary courts, 53, 58, 223 
Revolutionary Guards. See Islamic Revolu- 
tionary Guard Corps 
Rex Cinema fire, 48 
Reza (eighth Imam), 124 
Reza Khan {see also Pahlavi, Reza Shah), 27 
Reza Shah Pahlavi. S<?£ Pahlavi, Reza Shah 
Rezaiyeh, Lake. feLake Urmia 
rial, 73, 74, 147 
ring roads, 184 
rivers, 86 
roads, 183-85 

Roman Catholics in Iran, 128 
Roman Empire, 10, 11, 13 
Roosevelt, Franklin D., 31 
Roosevelt, Kermit, 34 
Roshanak. feRoxana 
Roxana, 10 

Ruhaniyun. See Militant Clerics Association 
Rumi, 93 

rural development, 109-10, 180, 184, 188, 
189, 190-91 

rural districts, 226 

rural society, 108-10 

Rushdie, Salman, 69, 241 

Russia: activities in Iran in World War I, 26; 
and Bushehr nuclear plant, 285-86, 287; 
and sanctions issue, xlvi; arms sales to 
Iran, 273, 275; loans to Iran, 25; relations 
with Qajar dynasty, 22-24; relations with 
Islamic Republic, 246-47; splits Iran with 
Britain, 26; war with Iran, xl 

Sadat, Anwar, 244 

Saddam Hussein. See Hussein, Saddam 
Sadi, 93 

Sadr, Abolhasan Bani. See Bani Sadr, Abol- 
hasan 



Safavi Empire, xxxix, 15, 18-21; establish- 
ment of state religion, 119; external 
threats, 18-20; structure, 18 

Saffarids, 16 

Safi ad Din, 18 

Saidi Sirjani, Ali Akbar, 75 

Salaam (newspaper), 75, 237, 238 

Salamis, Battle of, 9 

Salghurid dynasty, 17 

salt lakes, 86 

Samand, 178 

Samanids, 16 

sanctions, xlv, xlvi, xlvii, 72, 158, 242, 243, 

248-50, 272-73 
Sanjabi, Karim, 49, 50 
Sar Cheshnah, 167 
Sarkuhi, Farhad, 76 
Sasan, 11 

Sassanian Empire, xxxix, 11-14, 130 

The Satanic Verses (novel), 69, 241 

satellite television, 239 

satrap, 9 

satrapy (ies), 9 

Saudi Arabia, 44, 71,243 

SAVAK, xlii, 35, 48, 53, 276-77 

Sawad, 14 

sawm (fasting), 119 

scholars, Iranian, xxxix 

schools. See education; elementary schools; 

secondary schools 
SCIRI. See Supreme Council for the Islamic 

Revolution in Iraq 
Scud-B rocket, 266, 274, 275 
Scud-C rocket, 275 
Scythians, 6 

SDC. See Supreme Defense Council 

secondary schools, 134 

Second of Khordad coalition, 208, 209, 
210, 229-30 

security forces {see also internal security): 
and suppression of protests, 225; inde- 
pendent authority, 225, 227; under 
Islamic Republic, 277; under Mohammad 
Reza Shah Pahlavi, 35, 276-77 

security law of 1992, 74 

segregation by sex, 115-16 

SEE. See state economic enterprise 

Seleucids, 10 

Seleucus, 10 

self-censorship, 236 

self-employment, 155 

self-propelled artillery, 265 



346 



Index 



self-reliance, military, 261, 281 

Selim I, 20 

Seljuks, 16, 17 

seminary. 5^madrassa 

Semitic languages, 91 

Senate (upper house of parliament), 34 

September 11, 246, 250, 262, 282 

services sector, 180-83; major activities of, 

180-81; share of employment, 155; share 

of GDP, 180-81 
Seventh Imam (Musa al Kazim), 18 
sewerage, municipal, 138 
Shabaviz 2061 helicopter, 274 
Shabaviz 2075 helicopter, 274 
Shabaviz 2091 helicopter, 274 
Shah Abbas, 20 

shahada (profession of faith) ,119 
shahanshah (title), 11 
Shahin missile, 274 

Shah of Iran, 1925-41. See Pahlavi, Reza 
Shah 

Shah of Iran, 1941-79. See Pahlavi, Moham- 
mad Reza Shah 
Shahpur 1,11 

Shahrs. See incorporated cities 

shahraks (small towns), 103, 107, 108 

shahrdar (title), 11 

shahrestans. See counties 

Shahrudi, Ayatollah Mahmoud Hashemi, 

209, 215, 237 
Shahsavan. See Ilsavan people 
Shah Sulayman, 21 
Shah Sultan Hussein, 21 
Shamkhani, Ali, 275 
sharia (Islamic law), 120, 216, 224 
Shariati, Ali, 45 

Shariatmadari, Ayatollah Kazem, 50, 52, 
56, 65 

Sharif Emami,Jafar, 36, 48 

Sharifkandi, Sadeq, 76 

Sharjah, sheikh of, 44 

Sharq (newspaper), 238 

Shatt al Arab, 44, 68, 86 

Shia Islam, xxxix, 14, 15, 93, 118-27; and 
marriage, 113-14; basic beliefs, 119-20; 
institutions and organizations, 121, 124- 
25; political role of clergy, xxxix, xl, 216- 
17; religious hierarchy, 125-26; unortho- 
dox movements in, 126-27 

Shias in Iraq, 251 

ShiatAli, 15 

Shihab-3 missile, 274, 275 



Shihab-4 missile, 275 
Shihab-5 missile, 275 
shipping, 186 
Shiraz, 7,89, 131, 134 
Shirazi (organization), 230 
Shirazi, Mirza Hasan, 24 
short-wave radio, 238 
shrines, Islamic, 119, 124-25 
Shuster, Morgan, 26 
shuubiyya (literary controversy) , 14 
Sidewinder missile, 273 
Siemens company, 285 
Sirjani, Ali Akbar Saidi. See Saidi Sirjani, Ali 
Akbar 

Sistan va Baluchistan Province, 95, 96, 128 
Sixth Imam, 127 
smuggling, 96, 198-99 
SNSC. See Supreme National Security 
Council 

Society for the Defense of Human Rights, 
230 

soil degradation, 87 
Soroush, Abdol Karim, 75 
South Africa, 50 

Southern Sheelat Company, 172 

South Khorasan Province, 96, 97, 99, 127 

South Korea, 199 

South Pars gas field, 163 

South Persia Rifles, 26 

Soviet Union: and trans-Iranian pipeline, 

42; arms sales to Iran, 265, 273, 280; 

occupation of Iran, 1941, xli, 30, 258; 

post-World War II activity in Iran, 31, 32; 

relations with Iran, 30, 35, 42, 69; trade 

with Iran, 200 
spare parts, military, 265, 266, 273 
special drawing right, 201 
spheres of influence in Iran, 26 
Stalin, Josef, 31 
state broadcasting services, 58 
state budget, 152, 192-94; deficits, 193-94; 

expenditures, 193-94; revenues, 192-93 
state economic enterprise (SEE), 151-52 
status of forces agreement, with United 

States, 1964, 38-39 
steel industry, 179 

strikes, labor: government policy, 106; of 

1978-79, 49 
sturgeon fisheries, 173, 247 
Su-24 fighter, 267 
Su-25 fighter, 267 



347 



Iran: A Country Study 



subsidies: agricultural, 170, 172; as govern- 
ment policy, xlviii, 152; of electricity pro- 
duction, 191; of gasoline, xlvii; of natural 
gas, 165; of prescription drugs, 136; to 
households, 194 

succession issue, 41 

Sudan, 72, 244 

Sufis, 18 

Sufism, 126-27 

Siileyman, Ottoman leader, 20 
Sullivan, William, 51 
Sumer, 6 
Sumerians, 6 
Sunni Islam, xxxix, 118 
Sunnis, 15, 93, 118, 119,120, 127-28 
Super-7 fighter, 267 
Supplementary Fundamental Laws, 25 
Supporters of the Party of God, 231-32 
Supreme Consultative Assembly. See Majlis 
Supreme Council for Cultural Revolution, 
219 

Supreme Council for the Islamic Revolu- 
tion in Iraq (SCIRI),251 

Supreme Court, 223 

Supreme Defense Council (SDC), 263 

Supreme Judicial Council, 61 

Supreme National Security Council (SNSC), 
218, 279 

surface-to-surface rockets, 265-66 

Susiana, 6, 10 

Svedala Company, 167 

Switzerland, 273 

Syria, 148, 244, 261, 273 



T-72 tank, 265 
tabagheh (social tier), 101-2 
Tabatabai, Sayyid Zia ad Din, 27 
Tabriz, 18, 20, 89, 97, 101, 128, 134, 163, 
185 

tactical guided missiles, 273 
Taepo-Dong 2 missile, 273 
Tahirids, 16 
Tajik militias, 247 
Tajiks, 96 

talabehs (students), 121-22 
Talesh region, 96 
Taliban, 247, 250 
Tamerlane, 17-18 
Tavenir, 190 
tax base, 192 



tax policy: of Reza Shah Pahlavi, 28, 29; 
under Islamic Republic, 192 

Tehran, 88, 89, 97, 101, 127, 128, 131, 137, 
163, 180, 185 

Tehran Conference (1943), 31 

Tehran Province, 97, 130, 178 

Tehran-Qom-Esfahan-Shiraz highway, 184 

Tehran Stock Exchange, 196 

Tehran Times (newspaper), 238 

Tehran University, 209 

Teimuri people, 96 

Teimurtash, Abdul Hosain, 29 

telecommunications, 188-89 

telephone service, 189 

television broadcasting, 188-89, 238-39; sat- 
ellite reception, 239; to foreign countries, 
238 

terrorism, Iran's role in, 249, 250, 270, 282 
thermoelectric power, 190 
Thermopylae, Batde of, 9 
Third Imam {see also Hussein, son of Ali), 
120 

Timur. See Tamerlane 
Tobacco Rebellion (1891), xl, 24 
tobacco trade, 24 
topography, 85-87 

TOR M-l missile defense system, 273-74 

torture, 234, 235, 236 

tourist industry, 182-83 

trade establishments, 181 

transhumance, 110 

trans-Iranian pipeline, 42 

Transoxiana, 17, 20 

transportation system, 183-88 

tripartite treaty with Britain and Soviet 

Union, 1942, 30 
Trucial States, 42 
Truman, Harry S., 34 
Tudeh Party, 31, 32, 65-66 
Tughril Beg, 16 
Turabi, Hasan al-, 244 
Turkey, 71, 90, 166, 246 
Turkic ethnic groups, 96-97 
Turkic languages, 91, 97 
Turkish language, 97 
Turkish State Railroad, 185 
Turkmanchay, Treaty of, 22 
Turkmen Sahra, 98 
Turkmens, 18, 54, 98, 127 
Turkmenistan, 98, 186, 247 
Twelve Imams, 119, 120 
Twelve Imam sect, 118-25 



348 



Index 



Twelver. See Twelve Imam sect 
Type 63 rocket launcher, 265 

UAE. See United Arab Emirates 

ulama (clergy), 125 

Umayyad dynasty, 14-15 

unemployment, xlv, xlvii, 154-55 

UN Resolution 598, 69 

Union of Communists, 64 

Union of National Forces, 37 

United Arab Emirates (UAE), 42, 244, 281 

United Kingdom (UK; see also Britain): 
arms sales to Iran, 265; as emigre destina- 
tion. 90; trade with Iran. 198-99 

United Nations (UN), 31, 156; committee 
on Afghanistan, 1998, 249 

United Nations Convention on Torture, 
236 

United Nations Security Council, xlv, xlvi, 
243 

United States: and Iran-Iraq War, 68-69; 
and Kuwaiti tankers, 69; and oil national- 
ization, xli, 34; arms sales to Iran, 44, 68, 
265, 272; as emigre destination, 89-90, 
101; broadcasts into Iran, 239; diplo- 
matic talks with Iran, 2007, xlvi; eco- 
nomic assistance to Iran, 35; listening 
posts in Iran, 44; military assistance to 
Iran, 32, 35, 58-59; regional presence as 
security issue, 281-84; relations under 
Ahmadinejad, 251; relations under Raf- 
sanjani, 248; relations under Khatami, 
208, 249-51; sanctions against Iran, 72, 
248-50, 272; status of forces agreement 
with Iran, 1964, 38-39 

universities, 134-35 

upper class, postrevolutionary, 104-5 

Ur, 6 

Uralic-Altaic languages, 97 

uranium: enrichment, xlv, xlvi, 242, 251, 

286, 287; fuel acquisition, 286 
uranium hexafluoride, 287 
urbanization, 87, 95, 102-3. 108, 109, 153, 

184 

urban population, 89 

urban society, 102-3; class structure, 102; 
expansion of services, 1980s, 103; indus- 
trial workers, 105-6; modernization, 102; 
rural migration into, 1980s, 102-3; sub- 
urban development, 103 

Urmia region, 97, 128 



U.S. Embassy takeover, 1979. See hostage 

crisis of 1979-81 
Uzbek militias, 247 
Uzbeks, 18, 20 



vakil (title), 18 
vakil al ruaya (title), 22 
Valerian (Roman emperor), 11 
Valfajr-8 Shipping Company, 186 
vaqf (religious endowment), 28, 125 
velayat (general supervision by govern- 
ment), 216 
velayat-e faqih (doctrine), xli, xlii, 120, 208, 

216, 226 
Velayat-e Faqih (book), 45 
Venezuela, 163 

Vietnam, guerrilla movements, 45 

vigilante activity, 208, 209, 236 

villages: postrevolutionary development, 

110; social structure, 109 
Voice of America, 239 



Water and Elecuicity Company, 190 
water pollution, 88 
water supply, 138-39 
water transport, 186 

weapons of mass destruction (WMD), 262, 
275, 281,283 

welfare, 139-40; organizations, 139; tradi- 
tional attitudes, 139 

West Azarbaijan Province, 93, 96, 127, 128, 
247 

West Bank, 245 
Westernization, xl, xli, 5, 28 
West Germany, 198 
wheat, 169, 170, 172 
White Revolution, 37 

women: and divorce, 115; and reforms of 
Mohammad Reza Shah Pahlavi, 116; and 
reforms of Reza Shah Pahlavi, 28; as pres- 
idential candidates, 221; discrimination 
in legal system, 237; in education, 148; in 
labor force, 116-18, 148, 154; in medical 
professions, 137; in Revolution, 117; seg- 
regation of, 115-16; workplace discrimi- 
nation against, 118 

women's rights groups, 118 

women's suffrage, 37 

Workers' House, 106, 156 

working class, 105-7 



349 



Iran: A Country Study 



World Bank, 72, 151 

World Trade Organization, xlvii, 197, 242, 
251 

World War I: impact on Iran, 27; Iran's 
role, 26 

World War II: Allied occupation of Iran, 
30; impact on Iran, 31-32; Iran's role, 
30-31 



Xerxes, 7-9 



Yavaran oil field, 163 

Yazd Province, 130 

Yazdi, Ayatollah Mohammad, 209 

Yazid I, 15 



Yazidis, 94 

Yemen Civil War (1962-70), 42 



Zagros Mountains, 85, 87, 110-11 

Zahedan, 96, 185, 186 

Zahedi, Fazlollah, 34, 35 

zakat (almsgiving), 119, 125, 139 

Zand tribe, 21 

Zand, Karim Khan, 22 

Zanjan, 97, 99 

Zanjan Province, 96 

Zionism, 132 

Zoroastrians, 11, 130-31; representation 

Majlis, 221 
Zulfiqar tank, 265 



350 



Contributors 



Hossein Akhavi-Pour is professor of economics at Hamline 
University, Saint Paul, MN. 

Shaul Bakhash is Clarence J. Robinson professor of history at 
George Mason University, Fairfax, VA. 

Glenn Curtis is senior research analyst for the former Soviet 
Union and Eastern Europe in the Federal Research Divi- 
sion of the Library of Congress, Washington, DC. 

Mark Gasiorowski is professor of political science at Louisiana 
State University, Baton Rouge, LA. 

Eric Hooglund is visiting professor of politics at Bates College, 
Lewiston, ME. 

Jalil Roshandel is associate professor of political science and 
director of security studies at East Carolina University, 
Greenville, NC. 



351 



Published Country Studies 
(Area Handbook Series) 



Afghanistan 

Albania 

Algeria 

Angola 

Argentina 

Armenia, Azerbaijan, 

and Georgia 
Australia 
Austria 
Bangladesh 

Belarus and Moldova 

Belgium 

Bolivia 

Brazil 

Bulgaria 

Burma 

Cambodia 

Cameroon 

Chad 

Chile 

China 
Colombia 

Commonwealth Caribbean, 

Islands of the 
Congo 
Costa Rica 



Cote d'lvoire (Ivory 

Coast) 
Cuba 
Cyprus 

Czechoslovakia 

Dominican Republic 

and Haiti 
Ecuador 
Egypt 
El Salvador 

Estonia, Latvia, and 

Lithuania 
Ethiopia 
Finland 
Germany 

Ghana 
Greece 
Guatemala 
Guinea 

Guyana and Belize 

Honduras 

Hungary 

India 

Indian Ocean 

Indonesia 

Iran 



353 



Iraq 

Israel 

Italy 

Japan 

Jordan 

Kazakstan, Kyrgyzstan, 
Tajikistan, Turkmenistan, 
and Uzbekistan 

Kenya 

Korea, North 

Korea, South 

Laos 

Lebanon 

Liberia 

Libya 

Malawi 

Malaysia 

Mauritania 

Mexico 

Mongolia 

Morocco 
Mozambique 
Nepal and Bhutan 
Nicaragua 
Nigeria 

Oceania 
Pakistan 
Panama 
Paraguay 

Persian Gulf States 
Peru 



Philippines 

Poland 

Portugal 

Romania 

Russia 

Rwanda and Burundi 
Saudi Arabia 
Senegal 
Sierra Leone 
Singapore 

Somalia 
South Africa 
Soviet Union 
Spain 
Sri Lanka 

Sudan 

Syria 

Tanzania 

Thailand 

Tunisia 

Turkey 

Uganda 

Uruguay 

Venezuela 

Vietnam 

Yemens, The 

Yugoslavia 

Zaire 

Zambia 

Zimbabwe 



354 



(j'JCy U>S - GOVERNMENT PRINTING OFFICE: 2008—344-703 



